Inspiring 4G Communications: WiMAX and LTE

Positioning Paper

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

Table of Contents
Abstract....................................................................................................................................................................................3 Introduction.............................................................................................................................................................................3 The 4G Promise........................................................................................................................................................................3 WiMAX and LTE................................................................................................................................................................4 The Drill-Down on Both Technologies...........................................................................................................................5 Spectrum Availability Considerations....................................................................................................................................5 Focus on WiMAX....................................................................................................................................................................6 Focus on LTE..........................................................................................................................................................................6 WiMAX and LTE: History and Evolution.....................................................................................................................................7 WiMAX and LTE Comparison...............................................................................................................................................8 4G Action Plan........................................................................................................................................................................10 Possible Scenarios.................................................................................................................................................................10 Moving Forward...............................................................................................................................................................11

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

Abstract
The market is rapidly advancing toward 4G mobile communications and ubiquitous broadband. Today, operators are in an excellent position to take advantage of both todays widely-deployed WiMAX and emerging LTE (Long-Term Evolution) standards in order to leverage the power of both and deliver anywhere, anytime wireless broadband communications with a rich ecosystem and uncompromising economies of scale. WiMAX 802.16e, with a defined roadmap to 802.16m, and LTE Rev.8, with a defined roadmap to LTE Rev.10, deliver very similar performance. A multi-technology, WiMAX/LTE approach delivers profitability and flexibility to meet current demand, and empowers operators to migrate to future technologies while protecting their investment. This paper provides a high level overview of WiMAX and LTE and their evolution, as well as possible transition and coexistence scenarios.

Introduction
The drive toward 4G mobile communications is progressing full speed ahead. The dizzying pace of growth in mobile data usage and new applications demands that solutions be deployed to meet todays demand while work on new standards progresses. 4G solutions that deliver truly ubiquitous broadband will change the way many industries operate. Public utilities, smart grids, oil and gas, and video surveillance are just a few examples. Operators are in an excellent position to take advantage of the current state of the industry to establish 4G services today, enjoy a return on investment, and position themselves to take advantage of future technologies and platforms. Operators that embrace both widely-deployed WiMAX and emerging LTE will be uniquely positioned to leverage the power of both and deliver anywhere, anytime wireless broadband communications with a rich ecosystem and uncompromising economies of scale.

The 4G Promise
WiMAX and LTE are the two principal 4G mobile broadband technologies and research indicates that they will remain in the forefront for the next five to ten years. WiMAX enables new revenue generating applications previously reserved to fixed line broadband. Both are all-IP, integrating mobile broadband with IP networking, and both offer an ecosystem for networks, devices and applications. Equipped with an arsenal that includes todays WiMAX and a clear migration path to LTE, operators will gain a valuable competitive edge and gain market share by taking advantage of access to broadband spectrum and be early to penetrate wireless broadband markets.

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

WiMAX and LTE

For carriers looking at both the short and long term gains, the WiMAX vs. LTE question is short-sighted. And based on recent market trends and research, it is a moot point. It is clear that both WiMAX and LTE will be widely deployed. With the focus on delivering services and applications that exceed the customer expectations, the question is how to optimize and exploit both to deliver on the 4G promise and meet growing demand. A multi-technology approach is optimal and an extremely viable way for operators to grow their businesses today and tomorrow. A multi-technology approach allows carriers to take more variables into consideration and turn them into opportunities. These include the environment topography, such as urban or rural, and the type of applications deployed. A dual approach lets carriers select the most suitable solution and technology for each situation, and as a result, be prepared to overcome challenges in a more broad range of scenarios. For instance, WiMAXs lower cost of ownership, especially its cost efficient spectrum and IPR, and attractive time-to-market allows for more Greenfield operators to enter markets that were previously out of reach. In all likelihood, when TD-LTE matures, it may be a compelling alternative for operators who have a large percentage of mobile subscribers. Its ecosystem is expected to offer a large selection of handheld devices and favorable conditions for roaming. WiMAX will continue to be the preferred choice for fixed/nomadic deployments and for rural suburban environments. In any case it is clearly not advisable to transition before the ecosystem fully matures.

The Power of WiMAX and LTE

The undisputed principal mobile broadband platforms to be deployed over the next ten years Both are all-IP Both use OFDM air interface Current availability of market-tested and proven delivery of WiMAX services and applications Available to be operated in licensed spectrums and both address globally available bands

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

The Drill-Down on Both Technologies

If we take a close look, we see that the differences in performance between the two technologies are minimal. This becomes even more evident if we analyze the unique advantages of both technologies; each leverages the advantages of the other. In terms of economies of scale, the strong market adoption rate of both WiMAX 802.16e-2005 and LTE delivers the volume needed to make them both economically viable. Today, WiMAX enjoys the benefits of commitments with major chipset manufacturers, and the market has a strong embedded base of WiMAX-enabled devices. Research indicates that both WiMAX 802.16e-2005 and LTE will have rich device ecosystems based on standards-based designs, cooperation with chipset manufacturers, and the interest of developer communities and manufacturers of consumer electronics. And of course, performance is a crucial factor. WiMAX 802.16e, with a defined roadmap to 802.16m, will deliver similar performance to LTE Rev.10. Both approach the maximum spectral efficiencies of approximately 6 bits/Hz. Today, operators are delivering in excess of 3.5 bits/Hz. with 802.16e. Next on the WiMAX roadmap, and already proven in field tests, 802.16m, will deliver over 5.0 bits/Hz., greater than 100 Mbps per sector for a 20 MHz channel and similar to the promise of LTE. On the technology side, both are based on all-IP network architecture. This means reduced network complexity, faster handovers, flexible service delivery and all-important scalability. Interoperability with existing wireless technologies is of course, essential, and both WiMAX and LTE are seamlessly integrated with these platforms. The multi-antenna techniques used on both overcome all types of deployment challenges, such as interference, high-speed mobility and more. Spectral holdings are also a key factor, and early evidence indicates that operators will need both WiMAX and LTE to cover both TDD and FDD.

Spectrum Availability Considerations

Radio frequency is a valuable and finite resource, and today it is difficult to meet demand. The need for spectrum is being driven by the convenience and high use of mobile communications and the need for increased penetration combined with improved performance and the falling costs of wireless devices and services. Existing and new mobile broadband networks deliver a highly compelling user experience by allowing multimedia applications anywhere and are quickly consuming current spectrum allocations FDD is generally more expensive and is traditionally owned by cellular operators. TDD is less expensive and traditionally owned by broadband service providers and Greenfields. In the past, LTE was defined as FDD and WiMAX as TDD. The strong interest in China for TDD helped advance the TD-LTE standard, which can use the same spectrum bands allocated to WiMAX. LTE has frequencies allocated in the 700MHz, 2.3 and 2.5 GHz bands. WiMAX has frequencies allocated in the 2.3, 2.5 and 3.5 GHz bands. So operators who own spectrum in the 3.5 GHz band have to deploy WiMAX and only those who own 2.3-2.5 GHz TDD have the choice between the two technologies Eventually, operators will need all available spectrum to meet the high demands of data services. The simple choice between the FDD or TDD spectrum will simply not be enough. A combination of the two will be the only answer.

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

Focus on WiMAX
The WiMAX industry has clearly passed its inflection point, and offers a very competitive and broad end user device portfolio with attractive price levels. There are literally hundreds of types of devices, USBs, laptops, residential gateways, and handheld devices. This positions WiMAX as an operative and mature broadband wireless solution for operators with licensed TDD spectrum (2.x and 3.x GHz). Recent Infonetics market analysis indicates that the WiMAX industry reached a market level of $1.5 million TAM (Total Addressable Market) in 2009 and will continue to grow, reaching an estimated $3 million in 2012 with an annual CAGR of 24%.

Focus on LTE
The LTE industry is being targeted toward the evolution of 3GPP operators, with initial deployments in 2010-11. In general, the LTE industry is emerging along two paths.

FDD LTE
FDD LTE is being primarily driven by Verizon in the U.S. on the 700 MHz spectrum, and NTT with KDDI in Japan on 1.5 GHz. The major focus is deploying 3GPP Rel. 8 in hot areas, which are data-centric, while voice will run on existing 3G networks. LTE Rel. 8 is equivalent to WiMAX 16e in terms of capabilities, but lacks voice support and other services which WiMAX 16e enables, such as a retail model, L2VPN and more. LTE Advanced (Rel. 10) is equivalent to WiMAX 16m in terms of capabilities. LTE-A (Rel. 10) commercial deployments are expected to be available after 2013 or 2014 and are primarily driven by much higher capacity and support legacy 3GPP services, such as voice and SMS.

TD-LTE
Mainly driven by the Chinese market on the 2.6 or 2.3 GHz spectrum, realistic timelines for commercial deployments are expected to begin in 2012. TD-LTE is a primary alternative for WiMAX operators, who own TDD spectrum in 2.x GHz. Current research indicates that it is reasonable to assume that TD-LTE will become an attractive alternative to current WiMAX operators not before 2013 or 2014. It is expected to present a competitive end device ecosystem to WiMAX driven by volume from the Chinese market.

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

WiMAX and LTE: History and Evolution

Wireless Broadband (Greenfield Operators)

Fixed WiMAX

WiMAX 2.0

LTE-A

Cellular (Mobile Operators)

FDD LTE

3G

Technology Segmentation Figure 1: Notwithstanding the differences above, there is a great deal of overlap between the two technologies and even with WiFi.

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

WiMAX and LTE Comparison

WiMAX Deployments LTE

559 operators serving more than 620 million Few commercial network deployments people in 147 countries for FDD LTE Rapidly growing customer base Limited number of subscribers None for TD-LTE to date Commercial FDD LTE expected to grow in early 2011 Supports fixed, nomadic, and mobile use Only supports TDD, in the 2.3, 2.5, and 3.5 GHz bands Additional bands may be supported in future Developed for mobile, but could support fixed Supports both TDD and FDD TD-LTE: from 1800 MHz to 2.6 GHz (with possible inclusion of the 3.5 GHz band in the future) LTE FDD: from 700 MHz to 2.6 GHz IP-based w/ OFDMA modulation in downlink Single Carrier Frequency Division Multiple Access (SC-FDMA) uplink Powerful developing ecosystem Strong vendor and operator support

Target Applications Supported Frequencies

Modulation

IP-based w/ OFDMA modulation in uplink and downlink.

Ecosystem Standardization Drivers

WiMAX Forum certification program supports interoperability across vendors

Driven by vendors, operators, and Greenfield Led by 3GPP mobile operators and top players vendors Institutional leadership from Institute of Electrical Electronics Engineers (IEEE) and the WiMAX Forum Less complex solution Suitable for regional/rural operators who dont require 3GPP roaming Large long term market share Opportunities for international and domestic roaming

Roaming

Future Development

Upcoming WiMAX 2, based on IEEE 802.16m LTE Advanced still under development expected to be commercially available by 2012

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

Wireless Broadband

WiMAX 16d Fixed Services

WiMAX 16e Mobile Services

WiMAX 16m Backward Compatibility Enhanced Performance

Enhancements

TD-LTE 2.6 GHz

LTE-A RELEASE 10

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015...

HSPA++ 3GPP HSPA <208 (FDD) Operators HSPA+Upgrade SW or Minimum HW LTE RELEASE 10

Cellular

3GPP2 Verizon Docomo China Mobile

LTE Release 8 Overlay to CDMA Service Offering

LTE-A RELEASE 10

4G Technology Evolution Figure 2: A decade of technology evolution in the cellular and wireless broadband fields coming to convergence.

Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

4G Action Plan
So whats the action plan? Clearly, the answer is not to rest idly on spectrum holdings. To achieve and maintain a competitive edge, action in the 4G landscape needs to be taken today. That means deploying tried and true, open standard WiMAX platforms, with proven devices, applications and rich ecosystem. WiMAX lowers cost of ownership, especially with its cost efficient spectrum and IPR. The rapid time-to-market allows for more Greenfield operators to penetrate new markets. WiMAX is, and will continue to be, relevant for 4G wireless broadband due to: Maturity Availability Vibrant ecosystem, including devices Low Intellectual Property Right (IPR) costs Solid development roadmap RAN migration costs and complexity can be significantly reduced by software only upgrades like Alvarions SDR (Software Defined Radio) and the ability to support multiple air interfaces (LTE and WiMAX overlay).

Possible Scenarios
No Transition
Operator may choose to remain with WiMAX and forgo LTE entirely. This may be a worthwhile alternative for regional WiMAX operators focused on fixed/nomadic services, or targeted communities that do not have the wide area coverage to promote mobile access to customers or roamers.

Coexistence
Roll out an LTE network to complement existing WiMAX networks leaving both active. This allows operators to provide bundled services and dual-mode devices to help draw more subscribers. This approach also requires adequate spectrum, as well as financial resources to operate two networks concurrently and over the long term.

Overlay
Operator gradually rolls out LTE and migrates WiMAX subscribers to LTE with WiMAX and LTE operating in parallel. This offers more flexibility than a total replacement, as well as reducing the risk of service disruption, but requires access to adequate spectrum to handle both networks concurrently.

Total Replacement
Operator upgrades all users simultaneously. This may be the only option for operators with limited spectrum allocations since the cost of support for a network that combines WiMAX and LTE, even for a limited time, will be prohibitive. This option is most effective if a base station software upgrade is available, and subscribers have multimode devices supporting both WiMAX and LTE. If devices must be replaced and hardware changes are required, this type of transition will in all likelihood cause service disruption.

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Positioning Paper: Inspiring 4G Communications: WiMAX and LTE

Moving Forward
WiMAX will continue to strengthen and grow while the other technologies mature. WiMAX offers a compelling migration path and the prospects for TD-LTE are very positive. Operators need the flexibility to make the transition when they need it, at their own pace, without disrupting service. Therefore, it is to their advantage to continue to expand existing WiMAX networks, ensuring continuity of service and portability, even if, and when, they decide to make transition to TD-LTE. There is no doubt that both technologies will coexist. They are being driven from two separate ecosystems, and only both together will be able to meet the demand for broadband services that continues to grow at an electrifying pace. So for operators looking for a platform that meets current requirements, with the flexibility to accommodate future technologies and protect their investment, the answer isnt WiMAX or LTE. The answer is both.

Its about the addition of LTE to the mix, and not a switch. If LTE does take off, and there are devices with LTE and without WiMAX, we want to be able to service those customers too.
Ben Wolff, CEO, ClearWire

This publication contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Alvarions management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: potential impact on our business of the current global economic crisis; the failure of the market for 4G products to develop as anticipated; Alvarions inability to capture market share in the expected growth of the 4G market as anticipated, due to, among other things, competitive reasons or failure to execute in our sales, services provisioning, marketing or manufacturing objectives; inability to further identify, develop and achieve success for new products, services and technologies; increased competition and its effect on pricing, spending, third-party relationships and revenues; as well as the inability to establish and maintain relationships with advertising, marketing, and technology providers, and other risks detailed from time to time in the Companys 20-F Annual Report Risk Factors section as well as in other filings with the Securities and Exchange Commission. All the information in this publication is provided solely for information purposes, and is not a commitment, promise or legal obligation to deliver any products, features and/or functionalities, and should not be relied upon in making purchasing decisions. The development, release and timing of any products, features and/or functionalities described remains at the sole discretion of Alvarion. If and when any products, features and/or functionalities are offered for sale by Alvarion, they will be sold under agreed upon terms and conditions. This information may not be incorporated into any contractual agreement with Alvarion or its subsidiaries or affiliates. Alvarion makes no representations or warranties with respect to the contents of this publication, and specifically disclaims any express or implied warranties of merchantability or fitness for any particular purpose. Certain information contained in this publication is derived from carefully selected public sources we believe are reasonable, such as company websites, publicly available marketing materials, annual reports and accounts, analyst reports and published articles. Alvarion does not guarantee its accuracy or completeness and nothing in this publication shall be construed to be a representation of such a guarantee. The opinions expressed herein do not necessarily reflect the opinion of Alvarion - the same reflects the current judgment of the author of the relevant article or features and is subject to change without notice. Alvarion, its affiliates and any person associated therewith accept no responsibility for any liability arising from use of this document of its contents.

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About Alvarion Alvarion (NASDAQ:ALVR) is a global 4G communications leader with the industrys most extensive customer base, including hundreds of commercial 4G deployments. Alvarions industry leading network solutions for broadband wireless technologies WiMAX, TD-LTE and WiFi, enable broadband applications for service providers and enterprises covering a variety of industries such as mobile broadband, residential and business broadband, utilities, municipalities and public safety agencies. Through an open network strategy, superior IP and OFDMA know-how, and ability to deploy large scale end-to-end turnkey networks, Alvarion is delivering the true 4G broadband experience today (www.alvarion.com)

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