Telephony LIVE at NXTcomm08

Join us June 16 at NXTcomm08!

Hear keynotes from Dennis Huber of Embarq and Mike DeVito of BT Wholesale plus speakers from IBM, Cavalier Telephone, TDS Telecom and more!

Learn more or Register Now!

Clearwire-Sprint WiMAX deal reborn

more on the topic

More Related Articles

The partnership is not just financially complex, but operationally complex. The deal involves numerous wholesale and cross-service agreements. The Xohm brand and business model will follow Sprint’s WiMAX assets to Clearwire, and Clearwire will be the only company allowed to sell 4G access as a standalone service, West said. Sprint will essentially access the network as a mobile virtual network operator (MVNO), selling combined 3G and 4G access plans. The cable operators will be able to bundle mobile WiMAX services as well as Sprint voice and 3G data services as part of their programming and cable modem bundles, essentially reviving the Pivot joint venture that died last month. Even Intel and Google have the option of launching their own branded services as MVNO, though they must package the access as part of some other service.

On the operations side, Sprint will give Clearwire access to its tower sites and leases as well as its extensive fiber network for backhaul, all at below-market but above-cost prices. Comcast and Time Warner also both own fiber networks that penetrate deep into neighborhoods, but no mention was made of whether those assets will also be available to Clearwire.

As for content, Google will become the primary Internet services and portal supplier, becoming the default Web and local search provider on WiMAX devices sold on the network. It will also build the network’s mobile advertising framework, creating an additional revenue stream beyond the subscription model. Sprint’s infrastructure contracts with Nokia Siemens Networks and Samsung will also carry over to Clearwire, giving the operator two more vendors in addition to Motorola.

While the entanglements between all of the players are numerous, so is the potential number of sales channels. Comcast, Time Warner and Bright House already service a large portion of the broadband customers in the country. Google is the most visited search engine and Sprint not only has more than 50 million wireless subscribers but a huge retail distribution network.

It will take some time before Clearwire can take advantage of those new channels though. Sprint and Clearwire have only launched trials so far, Clearwire in Portland, OR, and Sprint in Chicago, Baltimore and Washington, D.C. According to Wolff, Clearwire today has networks covering 30 million pops either completed or under construction, but all of those networks are built using the proprietary NextNet technology supplied by Motorola, not true WiMAX gear.

Even as more WiMAX networks go live, Clearwire will have a limited number of devices to sell on it. With the exception of Nokia’s new Internet tablet, the only WiMAX devices released have been PC cards or desktop gateway modems, meaning the initial WiMAX connections will be primarily be pure access connections, similar to the 3G laptop services Sprint, AT&T and Verizon Wireless sell today. Wolff said he expects the first WiMAX-embedded laptops to be available by the end of the year, thanks to the efforts of Intel, and the first dedicated WiMAX handsets and consumer electronics to emerge in 2009.

While both AT&T and Verizon Wireless readily admit WiMAX will be ready before their own 4G networks go live, both have said there 3G networks will keep them competitive with any WiMAX service for years to come. VZW’s EV-DO network is already nationwide, and AT&T’s 3G high-speed packet access (HSPA) is in its final stages. Meanwhile T-Mobile is beginning its 3G rollout, launching its first HSPA market in New York earlier this week. HSPA and EV-DO networks have the capacity to offer broadband speeds and both have the advantage of huge device ecosystems. Verizon Wireless is expanding its broadband plans through a new open development initiative intended to bring new data-centric devices and applications to its network.

But Wolff said WiMAX’s competitive edge isn’t in its ability to deliver capacity, rather its ability to deliver capacity cheaply. He said the WiMAX network can deliver four times the capacity for the equivalent cost on a 3G network. That cost-advantage is already starting to show up on Clearwire’s pre-WiMAX NextNet network, over which it has been offering laptop connectivity services since September.

“We’re finding we’re able to get customers at the same general revenue levels or ARPUs as the 3G customers because we are delivering a much greater bandwidth and overall user experience with much more capacity even though we have a much smaller footprint,” Wolff said. “So there is a class or category of customer at least today that is saying ‘I might not be able to roam or go from market to market or even have as big a footprint, but because I spend 90% of my time in this areas where Clearwire is built today, I’m willing to pay $60.”

$60 a month is what all of the major operators charge for their 3G broadband access services though many of them have overall data caps and require voice contracts. As Clearwire continues to go head-to-head with those providers it can easily scale back capacity it offers to individual customers and lower its prices.

“We have the ability to compress pricing if we need to attract customers,” Wolff said. “We’ll see how it goes. We’re not making any pricing commitments today, but the economics of this business are very attractive.”

Get Updates Via Email

related resources

popular articles

Want to use this article? Click here for options!
© 2008 Penton Media Inc.

Webcasts

WEBCAST

Which Carrier Ethernet Business Model is Right For You?

Find out! Watch Telephony's LIVE Webcast May 13, 2PM ET/11AM PT. Telephony and IDC examine how various factors impact the Ethernet services business model. LEARN MORE or REGISTER NOW.

White Papers

WHITE PAPER

Addressing Data Integration Challenges with SOA

Read this paper on how SOA (service-oriented architecture) offers tremendous promise to streamline application development and enable productive re-use of existing services. Brought to you by Progress DataXtend. READ

Podcasts

PODCAST

Cloudshield and DPI Technology

Cloudshield's Peder Jungck talks about the "right" way to use DPI and how service providers can change the tenor of the conversation about this important -- yet controversial -- technology. LISTEN

Blogs

BLOG

Not everyone sees the magic in Jack

The success of MagicJack in numbers alone is without a doubt notable. Still, not everyone is singing Jack’s praises. ... READ

E-Books

E-BOOK

READ E-BOOK: MANAGING THE CUSTOMER EXPERIENCE

This e-book explains how to keep your customers happy, reduce churn and strengthen profits. Sponsored by CA’s Wily Technology Division. READ NOW!

TV

TV

Mobile Commerce: Driving Change in Mobile Backhaul

What is Mobile Commerce? How exactly does it work? Is it really poised to change the way you go about your business? Tune in to this timely video podcast from Tellabs to better understand this topic. WATCH IT NOW.

  • Telephony Content
  • Telephony Content

current issue

Current Issue

May 5, 2008

A look behind 10 key industry facts and figures reveals some market-altering trends that might surprise you. Read Now

INSIGHTS for
Next-Gen ILECs

Telephony's one-day conference at NXTcomm June 16, 2008 is the only educational and networking event for Tier 2, Tier 3 and Rural Service Providers. Register early for VIP access and early bird rates of $295! The first 40 that register will have the opportunity to attend a VIP luncheon on business valuation.
Learn more or
Register now.

Special Report: IPTV

In Telephony's newest Guide to IPTV, we give you the insight you need to deliver what the customer is looking for, while managing their expectations for future enhancements. Read now.

more news

Global >>

MORE

Ethernet >>

MORE

Independent >>

MORE

IPTV >>

MORE

IMS >>

MORE

WiMax >>

MORE

VOIP >>

MORE

FTTX >>

MORE

Access >>

MORE

Broadband >>

MORE

Wireless >>

MORE

Software >>

MORE

Podcasts >>

MORE

Get Updates Via Email

Browse Issues

  • May 5, 2008
  • Apr 28, 2008
  • Apr 14, 2008
  • Mar 31, 2008
  • Mar 17, 2008
  • Feb 25, 2008
  • Feb 11, 2008