Nortel shifts its focus from WiMAX to LTE

Nortel Networks is doing an aboutface on its 4G focus, announcing plans to put its R&D efforts behind LTE and teaming with Alvarion to come up with an end-to-end mobile WiMAX solution. The move is interesting given the fact that last year the company put WiMAX in the forefront of investments [1], investing millions every quarter. Now Nortel says LTE is where demand is emerging faster than predicted.

That may be true but Nortel also missed out on the WiMAX deals with the tier one operators it was aggressively trying to win last year. It lost out to Samsung and Motorola for Sprint's nationwide WiMAX business and hasn't been able to score those big wins aside from smaller deals with operators such as Craig Wireless in Greece and Chunghwa Telecom in Taiwan. So Nortel does what all major high-tech companies do when they lose out on the current generation of business: look to the future. And that makes sense for a vendor that already has inroads with operators such as AT&T and Verizon Wireless, which have committed to LTE for their 4G paths.

Meanwhile, Nortel will count on Alvarion to boost is chances in the WiMAX market. The two plan to combine their WiMAX initiatives with Alvarion supplying mobile WiMAX base stations and Nortel offering its gateway, core network, backhaul solutions, applications and professional services.

What does Nortel's move say about the WiMAX market? Is the WiMAX infrastructure market saturated? Is there a lack of quality contracts for big vendors like Nortel? With solid commitments to LTE coming from major tier one operators, could we see a major shift in focus from a number of other large vendors playing in the WiMAX business?--Lynnette [2]