Sprint's move to LightSquared LTE signals the final chapter for mobile WiMax

Sprint's announcement that it has signed a deal with LightSquared over LTE spectrum allocation has effectively shut the door on WiMax as a mobile phone technology.

Sprint is the only major US carrier to use WiMax, and has signed a 15-year deal with LightSquared, accepting $9bn in cash in exchange for spectrum hosting and network services.

In return the company can purchase $4.5bn of LTE services from LightSquared, and has the rights to half of the projected output of LightSquared's forthcoming network.

"We will receive $4.5bn in LTE credits should Sprint decide to use capacity on their network. No such decision has been made yet," Sprint spokesman Scott Sloat told V3.

Sprint is unlikely to have committed to a multi-billion dollar deal without the intention of seeing it grow to its fullest potential. The company has been running LTE trials, and this announcement is a clear sign that its WiMax network looks destined for the corporate scrap heap.

Charles Golvin, principal analyst at Forrester, believes that Sprint will make that shift by 2012 because of the economies of scale given LTE volumes versus WiMax.

"Sprint will will retain WiMax in its network because the cost is sunk, but eventually it will sunset the technology," he told V3.

Sprint's decision will mean the end of large-scale WiMax deployment for mobile users in the US, and the technology is already unpopular in Europe.

The first commercial deployment in Amsterdam eventually had to be shut down because of interference with military systems. The one European exception is the UK, which has been slow to deploy LTE systems.

Asia and Russia are now WiMax's biggest users. The WiMax Forum claims that 322 million people are now covered by WiMax in Asia, an increase of 100 million in the past 12 months, which makes it comparable to the combined US and EU markets.

But analysts agree that WiMax is on the way out.

"We've already seen this starting to happen with operators of WiMax systems making the move to LTE," John Byrne, research director for IDC's wireless and mobile infrastructure division, told V3.

"For Sprint this was not really a question of whether or not to replace WiMax, but when and how. But the business is doing well, there's room for a little growth before the decline and the company has no interest in pulling the plug."