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8 | June 2008
New Clearwire gives WiMAX a boost
But the joint venture, with multiple investors to satisfy, still faces a number of
challenges. By Mike Roberts, Informa Telecoms & Media
he new WiMAX new open Internet business models, devices, billions of dollars in WiMAX and is count-
venture between Sprint applications and services. ing on the technology to help drive sales of
Nextel, Clearwire and But it’s not all good news, of course. everything from notebooks to new device
other players—including Intel, First, at this stage the deal is a ‘proposed form factors such as Ultra Mobile PCs and
Google and three major cable transaction’ scheduled to close in the Mobile Internet Devices. Intel could simply
operators—is big news for fourth quarter, so there’s obviously a risk not aff ord to see the world’s highest-profi le
both WiMAX and the broader it will not go ahead as planned. And even WiMAX deployment—that of Sprint—suff er
mobile broadband industry. assuming that the new Clearwire venture from a lack of funding, which is rumoured
For WiMAX the deal, goes ahead as planned, it will be a huge to be one of the reasons Sprint’s WiMAX
Mike Roberts
which has been in the works challenge to focus and manage a company deployment and launch has been delayed, in
for months, is a major shot in made up of seven key partners with very addition to the reasons it has cited publicly,
the arm at a time when news of delays in diff erent interests. For example, it would be which include delays in installing new back-
Sprint’s WiMAX rollout had the technol- easy to imagine that internal battles could haul, billing and other systems.
ogy and its backers spending more time lead to delays, and there is precedent for Why have the cable operators invested
than they liked in defensive mode. this given that the initial deal reportedly in WiMAX as opposed to one of the
For the mobile broadband industry suff ered many delays. But only time will more established mobile broadband
the fact that Sprint Nextel and Clearwire tell on that one. Certainly the players in- systems such as EV-DO or HSPA? The
brought major cable operators on board— volved are optimistic that they’ve resolved simple answer is because the opportunity
namely Comcast, Time Warner and Bright many of their diff erences in the initial was there—both Sprint and Clearwire
House—signals that three successful agreement, and are hoping for smoother were looking for funding for their
converged operators see WiMAX as the sailing going forward. WiMAX deployments, and the cable
best route to expand from triple-play to In addition, the new Sprint/Clearwire operators have long been interested in
quadruple-play services, with the fourth WiMAX venture may have more modest moving into mobility.
service being mobile broadband. rollout plans than Sprint was planning for It’s also clear that mobile broadband
In addition, Sprint already had a its Xohm service. Last year Sprint said that operator Verizon Wireless will not be
WiMAX deal with Google, but the Internet its WiMAX service would have a popula- opening its mobile network to cable
giant has now signifi cantly increased its tion coverage of 100 million by the end of operators anytime soon, given that its
commitment by pledging $500m in fund- 2008, and the new Clearwire venture now fi xed-line affi liate Verizon competes
ing to the new venture in exchange for the says it will have population coverage of fi ercely against them for both voice and
right to develop and provide Internet appli- 120-140 million by end-2010. broadband subscribers. Verizon has also
cations and services for the new company. Although Sprint and Clearwire are invested billions to deploy its FiOS fi bre-
Bringing Google on board is a huge putting most of the assets and/or funding to-the-home service in a bid to leapfrog
boost for both the Sprint/Clearwire venture into the new company, in return for 51 per- the cable operators with a blazing-fast
and WiMAX generally. For the venture, cent and 27 percent shares respectively— bundle of video, Internet and phone
Google’s involvement makes it far more the remaining 22 percent of the company services. Similarly, AT&T is not a likely
likely that its new WiMAX platform will will go to fi ve strategic investors contribut- partner, given its longstanding competi-
come packaged with compelling new ing a total of $3.2bn. Th e cable operators tion with cable operators, its recent major
Internet applications and services to help are investing signifi cant amounts. Comcast investment in triple-play services via
it diff erentiate in a market where mobile is committing $1.05bn, Time Warner Cable its U-verse FTTH deployment, and the
broadband Internet is already taking off via $550m, and BrightHouse Networks $100m. rollout of HSPA services via its wireless
alternative systems such as HSPA and EV- Th ey would not be putting that sort of unit.
DO Revision A. For the WiMAX industry, money on the table unless they expected
landing a signifi cant strategic and fi nancial the WiMAX venture to deliver real value Mike Roberts is principal analyst at
commitment from one of the top Internet in their ongoing battle against the telcos. Informa Telecoms & Media. His latest
players provides signifi cant validation to Intel is also a big investor, with a $1bn report is Mobile Networks Forecasts: Future
the industry’s aspirations to diff erentiate commitment to the deal, although that is not Mobile Traffi c, Base Stations & Revenues,
WiMAX partly by using it as a platform for a surprise. Th e vendor has already invested
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