Xohm

Baltimore to Become Initial WiMAX Epicenter

Bernie — Wed, 18 Jun 2008 13:57:20 -0400

All eyes will be on Baltimore this Fall. Barry West of Sprint/Xohm/Clearwire announced that Baltimore will be the launch market for their WiMAX effort in September. It will make Baltimore the largest North American market for WiMAX (for the time being) and a true test of WiMAX’s capabilities on a large scale. West announced the launch at his keynote presentation Tuesday at the WiMAX Forum Global Congress in Amsterdam. The launch is somewhat behind schedule. Sprint/Xohm had targeted Spring 2008 for these initial launches. The Washington D.C. market will follow Baltimore and launch WiMAX in the fourth quarter of 2008 according to West. The details are in this telecoms.com post.

WiMAX Mega Deal Near

Bernie — Tue, 06 May 2008 19:10:07 -0400

Update - May 7, 2008: It's official. Sprint and Clearwire announced the formation of the "new" Clearwire, as discussed below in the original May 6th post.

A mega deal which involves Sprint, Clearwire, Intel, Google, Comcast, Time Warner Cable, and Brighthouse Networks is on the verge of being announced according to the Wall Street Journal (subs. req.). The deal will merge Sprint and Clearwire's WiMAX assets into a company valued at $12 billion. The company will retain the Clearwire brand and will be led by Clearwire's CEO Ben Wolff. The cable company investments totaled over $1.5 billion, led by Comcast who ponied up over $1 billion. The deal has been rumored for months. It is expected to be announced as early as Wednesday.

It appears as if WiMAX will now have the foothold it needs to become a 4G wireless force in the North American market. Cable companies including Comcast, Time Warner Cable, and Brighthouse will now have access to a legitimate broadband wireless network and begin the long process of integrating wireless opportunities into their core business. The deal will allow cable companies to sell broadband wireless under their own brand. It's somewhat surprising that cable companies and Sprint are partnering for another wireless venture, given the failure of their previous joint effort, Pivot Wireless. Perhaps Pivot's demise was intentional to make way for Clearwire. It's not clear what this development means for cable's AWS spectrum holdings. Regardless, this new WiMAX momentum will provide interesting competitive observations. Sprint will conceivably gain a considerable 4G lead over their main competitors, AT&T, T-Mobile, and Verizon, who have all tagged LTE as their 4G technology of choice. It will be at least a couple years before we see them bring something to market though. It's some welcomed news for Sprint, which has seen nothing but rumors focused on their troubles swirling for the past few weeks.

WiMAX is Center Stage Early On at CTIA

Bernie — Mon, 31 Mar 2008 11:50:00 -0400

WiMAX has a lot of early attention at this year’s CTIA show, going on now in Las Vegas. There is much anticipation surrounding the potential partnership between Sprint, Clearwire, and a variety of cable MSOs to finally bring Xohm home. In other early news about WiMAX, Xanadoo LLC announced the launch of WiMAX service in Springfield, Illinois. Xanadoo is the first carrier to utilize Cisco’s WiMAX solution, which it obtained after recently acquiring Navini Networks. Xanadoo serves four other markets in Texas and Oklahoma with about 14,000 subscribers, which they will eventually migrate over to WiMAX technology.

In other WiMAX news from CTIA, the WiMAX Forum released a report projecting more than 133 million WiMAX users globally by 2012. It also reaffirmed that the first Mobile WiMAX Certified products are expected to achieve certification in Q2 2008. Additionally, the forum estimates that by 2011 there will be more than 1,000 Mobile WiMAX Forum Certified products found throughout the world. Of course all of this news pales in comparison to the anticipation of learning about Sprint’s WiMAX plans. They are the lead horse in North America, and are widely considered to provide a make or break scenario for WiMAX on this continent. For the time being, the competitive implications of WiMAX on the U.S. telecom landscape ride on Sprint’s moves.

Cable May Be Stepping Up to the WiMAX Plate

Bernie — Wed, 26 Mar 2008 08:15:07 -0400

Cable’s lack of a clear wireless strategy has been seen as somewhat of an “Achilles heel” for them. After all, their growing competitive nemesis, namely AT&T and Verizon,, have clear wireless strategies and are executing them quite well. The ability to grow the triple play bundle to include wireless (the so called quad play) hasn’t been around long enough to draw firm conclusions about its competitive impact. But most analysts would agree, all things being equal, having a wireless option in your back pocket should prove to create an advantage. The other issue of course is wireless’ role as a growth engine. AT&T and Verizon have it and their triple play cable competitors do not.

All this leads to speculation about cable companies getting into wireless, and quickly. A recent Wall Street Journal article adds to the speculation by reporting that Comcast, Time Warner and Brighthouse are in talks with Sprint and Clearwire to invest significantly in a WiMAX partnership. According to the article, the three cable companies are talking about investing close to $1.7 billion, with Comcast being the lead with $1 billion. One idea suggests that the cable company investment would give them access to wholesale capacity to launch their own branded wireless service. Cox recently signaled their intention to pursue some type of wireless strategy as well by acquiring $305 million worth of 700 MHz spectrum.

While conceivably it makes sense for these companies to partner, it does have a little cloud hanging over its head. After all, these are the same companies that jointly launched the ill fated Pivot Wireless. Will they learn from those mistakes? These same companies are also sitting on a boat load of AWS spectrum. Perhaps they’ll look to leverage that spectrum in this venture, although there is no clear path for WiMAX over AWS spectrum. All this chatter points to a somewhat simple reality. Cable recognizes that it’s probably in their best interest to have a wireless arsenal of some type going forward. It would be a wise hedge against telecom competitors seizing a potential quad play rush. The real question is, can they figure it out fast enough? With wireless penetration exceeding 80% in the U.S. and telecom having such a wide lead, cable risks wireless irrelevancy before they even get going, unless they get going quickly.

Mobile Broadband Usage Grows by 157%

Bernie — Wed, 05 Mar 2008 09:11:46 -0500

According to comScore, access to the Internet through mobile broadband connections grew by 157% in 2007. Mobile broadband technology includes EV-DO Rev. A which is offered by both Verizon and Sprint. Mobile broadband connections are achieved through PC/laptop cards, built-in adapters, or by tethered smartphones. comScore pegs the number of unique mobile broadband users at 2.1 million. “Though mobile broadband access is currently used by about 1 percent of the total U.S. Internet population, it is poised for significant growth over the next few years,” said Serge Matta, senior vice president of comScore.

Mobile broadband will certainly increase dramatically, especially if Sprint’s Xohm gets off the ground soon. In fact, mobile broadband will increasingly impact the competitive landscape as more and more users find its convenience appealing. Mobile broadband has the potential to have a similar impact on landline broadband that cellular has had on landline voice. Additionally, telecom carriers will increasingly add mobile broadband to quad play bundles to create differentiation and competitive advantage. The numbers are low today because we are just leaving mobile broadband’s "embryotic" stage. But we will soon see "hockey stick" type growth and its competitive impact will be undeniable.

Clearwire Approaching Four Hundred Thousand Subs

Bernie — Tue, 04 Mar 2008 09:21:13 -0500

Clearwire announced fourth quarter and total year 2007 results today, ending the year with 394K subscribers. Clearwire grew their subscriber base by 91% over comparable numbers from year end 2006 and added 47K subs in the fourth quarter. Clearwire is now in 50 markets (including 4 international markets) and covers 16.3 million people. Clearwire generated $151 million in revenue for all of 2007 and ended the year with a $289 million loss. They attributed the loss to expanding sales and marketing costs as they try to expand penetration in existing markets and launch new markets. They launched in Charlotte, NC and Rochester, NY during the fourth quarter. Some metrics of note include:

ARPU for 2007 was $36.81, an increase of 5% versus the 2006 full-year ARPU of $35.06 for 2006
Churn increased slightly in 2007 to 2.1% from 1.9% in 2006
CAPEX was $361.9 million in 2007, versus $191.7 million in 2006
Covered POPs increased 70% during 2007

Clearwire’s scenario garners great interest from those of us who cover the competitive landscape. They are one of the few companies who are actively executing a competitive play on a fairly nationwide scale, using pre-WiMAX (which will eventually evolve to true WiMAX). They are somewhat of an indicator of the competitive implications that WiMAX and other 4G technologies can bring to the marketplace. Clearwire is far from profitable, and its long term prospects are questionable unless they successfully negotiate a business relationship with a partner who brings nationwide scale. All the talk is that Sprint/Xohm will be that partner (with funding Intel and others). You can’t help but question whether that makes sense given Sprint’s challenges these days. Unfortunately for Clearwire, Sprint may be there only option. The same holds true for WiMAX in general, because should both Sprint and Clearwire falter, WiMAX as a viable technology in North America would be in grave danger.

So Far So Good for Xohm

Bernie — Thu, 10 Jan 2008 08:48:43 -0500

Xohm’s internal corporate champion at Sprint, Barry West, is indicating its on course for Xohm, announcing a commercial launch timeframe of April 2008. West made these comments at CES on a WiMAX focused panel. There has been so much speculation about the future of Xohm that I don’t think anyone would have been surprised if Sprint pulled the plug on it. They still could. But for now, West says they are moving forward. There were a flurry of announcements at CES by Sprint about Xohm, including business partner agreements with Amdocs, SwapDrive, and McAfee. West says they will be offering multiple subscription options, including daily, monthly, an annually. Unlike traditional wireless plans, Xohm will not subsidize the cost of WiMAX devices.

I for one am very anxious to see how Xohm and other WiMAX operations impact the competitive landscape. Xohm will most certainly be marketed as an alternative to DSL and cable modem, much the same way Clearwire does today. When you add the mobility feature, it makes the WiMAX broadband option quite compelling. It will certainly add fuel to the fire of broadband speed “inflation,” as wireline carriers will most likely defend their turf by raising average wireline broadband speeds much higher than can be achieved wirelessly. A company like Xohm, with its potentially massive equipment purchasing scale, will also help lower the barrier costs for other, smaller WiMAX service providers. The result could empower many more additional WiMAX service providers, impacting the competitive environment even more. Look for the real impact to be noticed in 2009 or so. Stay tuned.

Sprint Puts its Faith in Hesse

Bernie — Tue, 18 Dec 2007 08:15:26 -0500

Dan Hesse is officially the man at Sprint Nextel, after resigning as CEO of Embarq to take on the huge challenge of righting the Sprint ship as their new CEO. Hesse is no stranger to Sprint, where he was appointed the CEO of Sprint’s wireline assets in 2005 prior to the Embarq spin off. Prior to Sprint/Embarq, Hesse spent over 20 years at AT&T and was CEO of AT&T’s wireless division from 1997-2000. He’ll need that wide ranging experience at Sprint, which has made numerous missteps since merging with Nextel. Hesse is also on the board of wireless giant Nokia. Hesse will have his work cut out for him.

Sprint is hemorrhaging subscribers and has many an investor nervous. Sprint is in such a weak position, it’s often thought of as a potential takeover target. There has been much speculation that cable giants like Comcast are eyeing Sprint as possible entrée into the wireless business. Sprint has formidable competitors in AT&T, Verizon, and T-Mobile, all of whom have been feeding on disgruntled Sprint subscribers. Many of those disgruntled subscribers are former Nextel customers, some of whom have expressed feeling like "second class" citizens at Sprint. Hesse will have many immediate strategic decisions to make, including what to do with Xohm, Sprint’s WiMAX effort. Hesse’s decisions on which direction to take Sprint will have serious competitive implications on the entire telecom landscape. This one will be interesting to watch.

Sprint Goes Soft on WiMAX

Bernie — Wed, 12 Dec 2007 10:22:16 -0500

Sprint will be “soft” launching WiMAX, branded as Xohm, in the Baltimore/Washington and Chicago markets this month. The service will be available to employees in downtown areas of the markets for beta testing. The soft launch will be followed by customer trials in the first quarter 2008, with commercial availability in the second quarter. Sprint plans to go with portable WiMAX out of the gate, featuring laptop cards. They also plan to aggressively move to mobile WiMAX, featuring devices powered by Intel. Motorola, and Samsung.

Read more details at this Telephony Online post.

Does Open Access Doom WiMAX?

Bernie — Fri, 07 Dec 2007 00:06:02 -0500

All of the recent news about open access may have some interesting competitive implications, and WiMAX may not be a benefactor. The success of open access initiatives is very dependent on the availability of “open” devices. In other words, the proliferation of "open" wireless devices will drive the success or failure of open access. If there are limited devices, there are few opportunities to connect to an open network. Many analysts think Verizon’s new openness centers around meeting the challenge of Google. The prevailing thought is if Google puts its influence and market power behind “openness”, well then Verizon better respond. But there is another way to look at this new found openness. Maybe Verizon’s moves have more to do with pre-empting WiMAX, than worrying about Google.

An early premise of WiMAX has been the openness it will bring. Sprint has been on record for some time about their intention to make the Xohm network open to all appropriate devices. Now Verizon says they will do the same for both their 3G and 4G networks. AT&T even recently got in the action, saying through the USA Today that they are officially open as well. T-Mobile announced long ago, their intention to be a part of the Google led open handset alliance movement. So here’s the rub. If everyone is all of the sudden open, and device availability drives the success of openness, where will the device manufactures put their focus? After all, there’s only so much silicon to go around. As a device manufacturer, I can focus my efforts on the 160 million plus subscriber universe of GSM/CDMA networks (U.S. market only in this example), or the potential of the unproven WiMAX marketplace. I think I’d place my bet with the former. So where does that leave WiMAX, Xohm, and Clearwire? Hard to say. Sprint appears to be shopping Xohm, and Clearwire had big hopes of partnering with Sprint/Xohm, which obviously didn’t happen. It’s certainly too early to declare WiMAX in serious trouble. It still has the backing of powerhouses like Intel, Motorola and Samsung. But time will tell whether WiMAX will be able to generate the device availability necessary to succeed over the long term. If I’m Clearwire or Sprint, I’m a little nervous.