GLOBAL 4G FOCUS SHIFTS TO U.S.

All eyes have turned to the U.S. For the first time since the early days of the industry, the U.S. has taken the lead in implementing the next-generational shift in wireless technology. The launch of Clearwire's WiMAX network has set off a chain of events that will culminate with multiple competitive 4G networks in the space of a few years, while much of the rest of the world is eking out one last final upgrade to their 3G networks. The only other regions with comparable ambitions are Japan and Scandinavia. And the world's vendors have stood up and taken notice.

“The U.S. has become the absolute driver of 4G,” said Ulf Ewaldsson, vice president and head of radio networks for Ericsson. In August, Ericsson won Nortel's CDMA and long-term evolution (LTE) assets at auction, which will immediately give Ericsson substantial North American presence and market share — two advantages the vendor hopes to leverage into future LTE contracts. “We will gain 450 engineers in North America,” Ewaldsson said. “We do that because of all of the commitments in the U.S. to LTE. We are showing our commitment to support all of the U.S. market.”

Nokia Siemens Networks originally bid on the same Nortel assets but refused to go trump Ericsson's $1.13 billion bid, claiming the price was too high. NSN's goals were similar to that of its Swedish competitor: to gain a large presence and customer base in North America just as the wheels of its 4G engine started turning.

“What that business offered and the reason it was attractive was that we would have catapulted to a market share around 30% here,” said outgoing NSN CEO Simon Beresford-Wylie. “Rarely does one get the opportunity to gain such a significant share.”

Failing to gain Nortel's wireless business, NSN has opted to grow its presence in North America organically. It has opened an LTE development center in North America, which will eventually employ 500 people. NSN has also elevated head of North America Sue Spradley to its executive board.

The competition isn't just heating up among vendors for American operator business, it's fomenting among the carriers themselves as they race their 4G networks to market. Clearwire has a definitive lead, with its WiMAX network, launched in five metro markets and in a dozen smaller ones. But Verizon Wireless is hot on its trail. Its first commercial LTE networks won't go live until next year, but VZW has announced an aggressive rollout schedule with plans for 100 million pops covered by the end of 2010, nearly matching Clearwire's planned 120,000 pops. MetroPCS has said it would match VZW's rollout schedule with a launch of its own in 2010, and AT&T's first LTE sites will go live the following year.

Clearwire is acting unfazed by the mounting pressure. In fact, new CEO Bill Morrow is milking its early lead for all its' worth. At 4G World in Chicago, Morrow mounted an attack on AT&T and fellow 3G network operators, claiming the capabilities of the Apple iPhone and other data-intensive devices were being squandered on the slower 3G networks.

“I don't want to talk badly about any of our competitors, but the reality is the 3G network is not built for the broadband data speeds we're talking about,” Morrow said. “Are we really enabling the full power of the mobile Internet if we're restricting ourselves to the 3G network?”

AT&T has wound up taking the brunt of criticism, in part due to its slower rollout of 4G services but also due to the increasing data bottlenecks in its 3G networks. AT&T, however, has also been one of the most successful operators, using the iPhone, mobile broadband plans and other emerging devices to spur unprecedented usage on its network. At 4G World, Kris Rinne, senior vice president of architecture and planning for AT&T, revealed that data traffic has grown almost 5000% in just three years, severely taxing the capabilities of its 3G network. A planned upgrade of that network to support high-speed packet access speeds of 7.2 Mb/s will double AT&T's current network capacity while adding fiber to its backhaul network. Repurposing more spectrum for mobile broadband and opening up cellular bands for 3G will also alleviate some of that pain. AT&T, though, won't be following its original plans to upgrade the network to HSPA+ , which would boost capacities to theoretical highs of 21 Mb/s. Instead it will focus its energies on the 2011 LTE rollout.

At CTIA Wireless IT and Entertainment in October, John Donovan, chief technology officer for AT&T, defended the company's strategy, saying its growing pains were incurred by the massive influx of data usage, not from any neglect on AT&T's part. The iPhone and other data devices were taxing every part of the network from core to backhaul to radio access itself. And though AT&T is rushing to fix network problems wherever they occur, it is facing a moving target. He anticipated data traffic over its backbone transport network will grow 60% alone this year.

“For those of you thinking I'm ignoring our criticisms, I've read the blogs and I monitor Twitter occasionally …but I don't plan our network based on blogs,” Donovan said during his keynote. “I plan it based on the needs of our wireless customers. We are working incredibly hard to make that experience a great one. We understand the wireless data customer better than any other.”

While regulators have been keeping a close eye on wireless operators to ensure they stay competitive, the FCC has also been using its policy arm to spur on the adoption of 4G. When the FCC auctioned off the 700 MHz airwaves earlier this decade, they started the current wave of mobile broadband deployments. At CTIA, new FCC Chairman Julius Genachowski promised the FCC would identify more spectrum for wireless use through reallocation and encourage the rollout of 4G networks and services by removing regulatory and business obstacles.