4G

Full Speed Ahead for Clearwire and WiMAX

Bernie — Fri, 21 Nov 2008 01:07:15 -0500

With the approval from shareholders now behind them, Clearwire is set to embarq on an historic journey to build a national footprint of 4G mobile Internet in the U.S., potentially creating a new formidable competitor for both wireless and wireline broadband. All regulatory and business structure hurdles have been removed, and Clearwire and Sprint can now combine their WiMAX business units into one. They aim to formally close the transaction by the end of the year. "With an unmatched spectrum portfolio, a next generation all IP network, an ever-expanding ecosystem of mobile 4G devices, and the backing of some of the most innovative communications, entertainment and technology companies in the world, Clearwire is ready to redefine mobile Internet services in the U.S.,” said Benjamin Wolf , CEO of Clearwire, in a company statement.

Now it’s time to perform. Talk is cheap in these competitive times. Clearwire has some huge challenges ahead of them. Building the type of network they aim to do has never been done on a nationwide scale. Among the successes they will surely exploit, there will be bumps in the road, missed expectations, and a huge amount of skepticism to overcome. Are they up to the challenge?

$25/Month for 4G WiMAX from Xohm

Bernie — Mon, 29 Sep 2008 13:06:13 -0400

Sprint made it official today, and launched their Xohm WiMAX service in Baltimore, MD. The “official” Xohm launch takes place on October 8th, but the Xohm website is taking orders now. Xohm is positioning the wireless service as an alternative to DSL and cable modem, but is very coy about exactly what speeds they are offering – “XOHM is expected to provide average connection speeds comparable to or better than basic DSL and Cable internet service.” Xohm goes on to say that those “averages” equate to “786 kbps download speeds for DSL and 1.5 mbps download speeds for cable.” Here is the pricing breakdown:

Home Broadband Service - $35/month, with a six month $25/month promotion, providing a DSL/cable modem replacement type service. Requires a $79.99 modem.
On-the-Go Service - $45/month, with a six month $30/month promotion, providing wireless broadband service through laptop cards, comparable to existing 3G services from Verizon, AT&T, etc, but slightly improved in broadband performance. Requires a $59.99 laptop card/modem.
Daily On-the-Go – same as above, but for a daily rate of $10/day
Pick 2 – allows the use of two WiMAX devices on the network for $65/month, but is offering a $50/month for life promotion. Customers could have both their home and mobile broadband needs met with this single plan. Requires the purchase of the appropriate equipment.

The world of 4G wireless and the competition it empowers is upon us. It’s obviously real early. Very limited deployments, combined with limited availability of devices will not contribute to setting the market on “competitive fire.” But it’s a start – one worth watching.

If the issue of 3G and 4G wireless is of interest, I encourage you to register for an upcoming September 30, 2008 free webcast that Pivot Media is producing – 3G: Launching Toward 4G. We will be outlining the market landscape for 3G today and 4G tomorrow.

GSM Association: 4G Wireless Will Deliver 100 Mbps

Bernie — Thu, 21 Aug 2008 23:45:51 -0400

The GSM Association, a worldwide trade body made up of GSM wireless carriers, told mobile news that 4G LTE wireless will reach 100 Mbps. They are apparently in a provocative mood too, because not only do they claim 4G LTE will reach 100 Mbps, but will do so before wireline FTTH networks do so commercially. Dan Warren, GSMA director of technology tells mobile news, "Tests show LTE can produce speeds up to 186 Mbps, but obviously you never get the top speed and they vary with distance from the base station and interference.” These comments were placed in the context of European and Asian markets, but if they are indeed more than just boastful claims, competitive implications will surely be felt worldwide. Wireline broadband carriers will have some time to perfect their competitive response. Even by the GSM Association’s eternally optimistic timelines, we likely won’t see these type speeds until 2012 in Europe, and even later in the U.S.

Clearwire Outlines 4G World Domination Plans

Bernie — Thu, 12 Jun 2008 23:29:34 -0400

Clearwire is feeling quite confident these days. The emerging WiMAX provider held an investor conference and outlined their plan for 4G domination. We're "building the communications company of the future, today," says Clearwire CEO Ben Wolf. Clearwire chief strategy officer Scott Richardson calls it "the second coming of the Internet." It was quite the WiMAX pep rally. Clearwire executives say they intend to build a seamless nationwide 4G network way ahead of their competitors, namely Verizon and AT&T.

From a powerpointware perspective, the strategy looks real impressive. Clearwire intends to offer a five product suite of services which will include residential voice and broadband, mobile voice and broadband, and mobile entertainment. They intend to leverage their investor partners considerably, gaining access to tens of millions of existing subscriber relationships immediately. With their cable company partners, they intend to extend the cable entertainment experience "into the palms of consumer's hands." They intend to utilize Google's Android platform for a suite of "compelling" mobile applications. Intel will contribute by powering millions of end user devices and do for WiMAX what it did for Wi-Fi, in effect bringing it to the mainstream. Wolf says that the average consumer's total household spend on communications, ranging from $109-$258, is up for grabs, and they intend to capture as much of it as possible.

Is Handset Exclusivity Anti-Competitive?

Bernie — Wed, 21 May 2008 09:02:47 -0400

The Rural Cellular Association (RCA) has asked the FCC to investigate the common practice of exclusive handset distribution deals for major wireless carriers. RCA claims such practices are anti-competitive and deny rural consumers access to newer and popular wireless devices. Perhaps the poster child of this issue is the iPhone, and the exclusivity AT&T has with it in the U.S. But there are numerous other examples. The RCA assembled an outline of some of the leading handset exclusivity deals in an appendix of their filing. RCA says the situation is “… creating another ‘digital divide’ between urban and rural America.”

This is a tough issue. Exclusivity is a key weapon in the intense competitive battles between wireless carriers. You could easily argue that exclusivity is fair game in this competitive landscape. But RCA brings up valid points – wide swaths of consumers, almost at the statewide level, are unable to enjoy the benefits of these advanced devices, in large part due to exclusivity deals. Perhaps the more concerning argument is do these exclusivity deals create higher prices for consumers, which would not be the case if the devices were offered by competing carriers. The issue will only intensify as new 3G and 4G devices begin to penetrate the marketplace. These newer devices and the “cool” applications they provide will be fertile ground for exclusivity deals by wireless carriers, as they try to differentiate their service from their competitors. Unfortunately, there are no easy answers for this issue. It’s one of many debates created by a marketplace where multiple competitors are chasing billions of dollars of potential revenue. The stakes are quite high.

AT&T Offers Glimpse into 4G, LTE Roadmap

Bernie — Thu, 03 Apr 2008 23:53:54 -0400

AT&T gave a glimpse into their 4G strategy, announcing they will use their considerable 700 MHz spectrum holdings for forthcoming long term evolution (LTE) technology. It’s the clearest direction AT&T has given to date about their long term 4G plans. AT&T says its 700 MHz spectrum will cover 100 percent of the top 200 markets and 87 percent of the U.S. population, “enabling the company to better compete in a vibrant and dynamic marketplace.” RCR Wireless is reporting that AT&T will also supplement its 700 MHz spectrum with AWS spectrum they acquired in a 2006 FCC auction.

In other 4G news, Sprint announced a delay in their 4G WiMAX plans. Xohm, Sprint’s identified WiMAX brand, will not launch in April as had been previously discussed. Sprint executives continue to publicly support Xohm, and promise it will soon be a reality. Verizon Wireless is expected to announce their 700 MHz plans soon. They have previously committed to LTE, but they will offer more details on their 700 MHz plans on April 4th. All of this talk of LTE and 4G by AT&T and Verizon should put pressure on their cable MSO competitors to outline their 4G wireless strategy. Will they go it alone with their own AWS spectrum, or will the rumors of a WiMAX joint venture with Sprint come true. With LTE research and development efforts providing wireless 100 Mbps speeds, one would have to conclude that the cable industry can’t afford to sit 4G out, as they have with the first three generations of wireless.

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.

Sprint and Clearwire Back in the Saddle Together?

Bernie — Tue, 29 Jan 2008 16:32:00 -0500

There is speculation fueled by a Wall Street Journal article (subscription required) that Sprint and Clearwire have resumed negotiations to jointly build a nationwide WiMAX network. Of course the issue with this is money. It costs a heck of a lot of it to bring a new technology like WiMAX to market. Clearwire is not big enough to do it alone, and Sprint investors don’t have the stomach for it, considering the debacle caused by the Sprint-Nextel merger.

The Wall Street Journal reports that Intel, Google, and Best Buy have joined the discussions as possible investors. Makes logical sense for all of them – they all stand to gain should a WiMAX a nationwide network prosper. It is a risky proposition considering the other 4G alternatives that are out there, namely LTE, which both Verizon and AT&T have hitched their wagon to. WiMAX has at least one advantage if all of these identified players get there act together and get moving. WiMAX could conceivably get a head start on LTE, and Sprint might be able to get some of their “mojo” back. They’ll need it to compete over the long term with Verizon, AT&T, and even T-Mobile. Right now, they’re looking like a wounded fish in a tank full of sharks.

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.

Verizon and Android: That Didn’t Take Long

Bernie — Tue, 04 Dec 2007 22:16:45 -0500

Verizon has announced they will join the Google led open handset alliance, also known as Android. Seems like good timing – coincides with their own openness initiative and their future 4G plans. Verizon hopes their new “openness” will lead to millions of additional consumers using their wireless network, all of whom will pay some type of toll, either directly to Verizon, or indirectly by accepting targeted advertising.

I equate this pending open wireless world with the video business model. In the not too distant future, consumers will be able to buy a device (think a television), connect it to a network, and pay to use it (think subscription video/cableTV) or utilize it for free, but accept targeted ads (think broadcast TV). Customers will consume content over this network, and oh yeah, occasionally make a call or two. The only question left is, how soon before AT&T joins the open party.