Nortel has fast become one of the industry's most scathing critics of 3G. Since selling its UMTS assets to rival firm Alcatel Lucent last year, the Canadian vendor has pounced on any opportunity to cast 3G as a vastly inferior technology to mobile WiMAX, in which it is investing almost six percent of its annual US$1.7 billion R&D budget. So when it comes to passing judgement on competitors backing 3G all the way, CTO John Roese does not mince his words.

"I wish them the best of luck doing it but frankly I think they're fooling themselves," he says.

Roese thinks it will be impossible for 3G to match the efficiencies of mobile WiMAX across a range of applications. Because 3G was built on top of networks designed solely for voice, he says, it carries a lot of "legacy baggage" that makes it too costly to become a mass-market data service. Mobile WiMAX, he argues, was developed from the outset to support high-speed data services, and that makes it a far more economical bet across a wide range of applications.

Greater performance, lower cost

Roese's view is a controversial one. Critics dismiss Nortel's investment in WiMAX as a desperate gambit to build a mobile broadband business by a company that failed to make a success of 3G. Ericsson, which remains one of the telecom industry's fiercest WiMAX critics, reckons 3G will have 20 times as many subscribers as mobile WiMAX by 2011 (600 million versus 30 million). Even accepting WiMAX is operationally more efficient – which many don't – operators sticking resolutely to 3G say its long lead time and well-developed ecosystem give it a cost advantage WiMAX will never overcome.

Roese is unfazed. "3G has done a great job of improving voice, but it hasn't mobilized the Internet," he says. "WiMAX will provide significantly greater performance at significantly lower cost."

He believes 3G is impeded not only by costs relating to intellectual property rights, which rest in the hands of just a few big manufacturers, but also by its insatiable appetite for battery power. "As [Apple CEO] Steve Jobs points out, 3G chipsets are a battery pig," he says.

During last week's launch of Apple's iPhone in the UK, Jobs blamed the desultory performance of 3G handsets for his aversion to the technology. Instead, iPhone has been made compatible with 2.5G standards like GPRS and EDGE, which could disappoint customers expecting to use their iPhones for higher-speed data services.

Roese adds his voice to a growing chorus when he says "the iPhone is on the wrong network," but he is probably in a minority when he says Jobs should look to mobile WiMAX instead of 3G in the long term. Is Nortel in discussions with Apple on the issue?

"We've had some dialogue with them but Apple is very pragmatic," says Roese. "They've taken a safe path to get maximum coverage, but I think long term they need to be on a 4G network, optimized for what they want to accomplish."

When WiMAX?

A persisting concern of operators is whether WiMAX equipment from different vendors will be fully interoperable.

Dov Bar-Gera, the CEO of European WiMAX operator WiMAX Telecom, is just one leading executive who says he is frustrated by the lack of progress in this area. In a recent conversation with Telecommunications, Bar-Gera said he did not expect any decent end-user equipment to be available before the end of 2008. What is Nortel's latest take on the commercial readiness of the technology?

"On a worldwide basis 2007 will end up being a year of commercial trials, rather than big revenue-generating networks," says Roese. "In 2008 we'll see development on the CPE front. CPE compliance with networks is certainly the biggest issue, but we've got CPE suppliers lining up for testing with us."

Nevertheless, he doesn't expect "real commercialization" to begin before the "2008/9 timeframe." The main catalyst, he insists, will be Intel's efforts to install new WiMAX chipsets in a wide range of consumer devices, from laptops and PDAs to mobile gaming consoles. But he is also encouraged by recent developments in Western Europe.

"A year ago people saw no reason for WiMAX in Western Europe given the maturity of 3G," he says. "Now some operators are saying there is a commercial opportunity for WiMAX. We feel a little vindicated."