State of Telecom Industry in Pakistan

There has been a lot of debate and discussion about LTE and WiMAX standards. The battle has been played at different levels: geography, countries, telecom equipment makers, network operators etc. LTE has certainly picked up a lot wins but as this WSJ report shows both LTE and WiMAX are widening their foothold.

Though WiMax does have some momentum, LTE is expected to be the broadband standard of choice for most wireless-service providers. The two technologies have similar capabilities, but LTE has less upfront costs for carriers since it can be built on top of existing network infrastructure.

Now that Long Term Evolution is shaping up to be the wireless broadband standard of choice for the U.S. and most developed markets, start-ups building silicon for wireless consumer devices are pushing out chips for the standard.

One such company, Altair Semiconductor Ltd., began sampling its Long Term Evolution, or LTE, chips in September, according to Eran Eshed, its vice president of marketing and business development.

For Altair, which continues to sell WiMax chips, it was more an expansion than a shift. From its beginnings, the company’s management expected significant changes to the broadband wireless landscape, so it designed a chip that could be altered to be used with multiple wireless platforms, Mr. Eshed said.

Founded in 2005, Altair built its first products for the WiMax standard since it had the most traction at the time, but the promise of large WiMax buildouts never really came about and the company has generated little revenue from those products, Mr. Eshed said.

That’s not to say a lack of success with WiMax is solely driving the move toward LTE.

Sequans Communications SA, a competitor to Altair, was able to generate $23 million in revenue from its WiMax products last year. The Paris company recently raised a new round of capital from Alcatel-Lucent and Motorola Ventures to build samples of its LTE products, which it expects to ship at the beginning of the year.

On the back of a $9.5 million round in February from investors that include BDC Venture Capital, Solidarity Fund QFL and Multiple Capital, Wavesat began sampling its first LTE chip last month. The company is raising $12 million to get those chips into production by March, said Raj Singh, the company’s chief executive.

Like Altair, Wavesat has developed a chip architecture that can be reprogrammed to multiple standards, so it isn’t banking on LTE alone.

Expanding into the LTE market isn’t simple; it brings multiple new challenges that didn’t exist in the WiMax market.

For one, these companies will be going head-to-head with two established chip companies, Qualcomm Inc. and ST-Ericsson, with more likely to enter the market later. In the WiMax market, the competition was mostly other start-ups, which were selling to smaller vendors and carriers, Mr. Eshed said.