Clearwire trialing LTE – could fit alongside WiMax someday

Clearwire (NASDAQ:CLWR) took the first step in what could become a wholesale transition of its WiMax network to the more globally prominent long-term evolution (LTE) technology. The operator announced plans to test two configurations of LTE over its 2.5 GHz spectrum using Huawei and Samsung gear.

CEO Bill Morrow said Clearwire is by no means committing to deploy commercial LTE networks in the future but it aims to show it could make such a transition between 4G technologies with ease, reusing much of the same infrastructure, as well as prove that LTE and WiMax could co-exist in the same network.

“As we have consistently stated we remain technology agnostic,” Morrow said at Clearwire’s second quarter earnings call. “If we elect to add LTE to our network at some point we could do so using existing core infrastructure and backhaul.”

Clearwire isn’t just looking for parity between the LTE and WiMax networks. In the trials, Clearwire will be testing advanced configurations which the operator claimed would produce real world speeds of 20 Mb/s to 70 Mb/s. If such numbers proved to be true, the LTE networks would not only outpace it’s own WiMax networks, which delivers speeds between 3 Mb/s to 6 Mb/s, but the 5 Mb/s to 12 Mb/s Verizon is currently clocking on in its LTE trials.

Clearwire said the tests would “showcase the unique capability of Clearwire's unmatched spectrum holdings,” meaning it would use some of the widest band configurations in the biz. In one test it would use a split channel configuration using up to 40 MHz of spectrum, four times more than it uses for WiMax today. Clearwire holds 100 MHz of 2.5 MHz spectrum in most markets, but in most cases it is only using 30 MHz giving it a luxury to deploy super-channels that other operators can’t afford. Due to 4G’ss unique architecture of sub-channels, there’s technically no limit to how wide of carriers Clearwire could deploy.

Clearwire is testing LTE in both its time-division duplexing (TDD), using 20 MHz channels, and frequency division duplexing (FDD), using two contiguous 20 MHz channels. Clearwire’s spectrum is technically TDD, but a majority of the world’s operators are deploying in FDD configurations. If it could configure its spectrum in uplink and downlink bands for LTE, Clearwire could overcome one of its biggest obstacles, alignment with the global 4G ecosystem, meaning it could support the same devices as other LTE operators in 2.5 GHz and 2.6 GHz.

For the tests Clearwire tapped two of its existing WiMax vendors, which will use the same base station platforms utilized in their respective WiMax markets. Conspicuously absent from the list was Motorola (NYSE:MOT), which could be a significant blow to the company considering the investment it has placed in developing TD-LTE technology. Huawei also said it would be working with Beceem Communications, presumably for its dual-mode LTE-WiMax chips, as well as several other unnamed partners. Since Clearwire plans to demonstrate how the two 4Gs can interwork, those partners will most certainly include Tellabs (NASDAQE:TLAB), which is deploying Clearwire’s 4G mobile core gateways and Cisco Systems (NASDAQ:CSCO), which is building the remaining IP core.

In the second quarter, Clearwire reported 722,000 net subscriber additions, shocking growth considering Clearwire had less than 1 million customers at the end of Q1. Due to the growth Clearwire revised its subscriber projections upwards from 2 million to 3 million. Most of those new subscribers, however, were added in Clearwire’s wholesale arm, which got a huge shot in the arm in June when 4G reseller Sprint (NYSE:S) launched the first 4G smartphone the HTC EVO 4G.

The device not only proved popular but Sprint sold it in markets where Clearwire has yet to offer WiMax service, so a good deal of those new additions are subscribers in name only, who don’t access the network and bring in nominal revenues. The majority of Clearwire’s revenue still comes from its Clear retail service, which accounts for almost 1 million of its overall subscribers.