& cplSiteName &

Cable Plays Clearwire Card

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
5/7/2008
50%
50%

It's official: The cable industry is getting into the WiMax biz in a big way.

As expected, three major U.S. cable operators that serve more than 39.4 million subscribers combined -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Bright House Networks – are pumping millions into a new WiMax-powered "mobile broadband company" formed by Sprint Corp. (NYSE: S) and Clearwire LLC (Nasdaq: CLWR). The WiMax venture will be called Clearwire, though Sprint, which is contributing its Xohm holdings, will hold a 51 percent stake. (See Sprint, Clearwire Create $14.5B WiMax Giant and WiMax Wednesday?)

According to the terms announced this morning, Comcast is kicking in $1.05 billion, Time Warner Cable is putting up $550 million, and Bright House is chipping in $100 million. They, along with other "strategic" partners such as Google (Nasdaq: GOOG) and Intel Capital , will own 22 percent of the venture through investments totaling $3.2 billion. The valuation of the new WiMax entity is nearly $14.55 billion. The boards of all parties involved have approved the deal, which is expected to close sometime in the fourth quarter of 2008.

Comcast, Time Warner Cable, and Bright House have also forged 4G and 3G wholesale agreements that will enable them to offer coming mobile WiMax services from the new Clearwire entity and to bundle and resell existing, third-generation voice and data services from Sprint.

In a note issued this morning, Sanford C. Bernstein & Co. Inc. analyst Craig Moffett surmised that the wholesale nature of the model suggest that the individual companies "would serve as retailers, and would retain ownership of customer relationships while purchasing network services from the wholesale entity."

While that would seemingly give cable more control of the situation, the public MSOs involved in the deal attempted to calm earlier investor fears that a new wireless/mobility strategy would put MSOs on the cusp of a huge capital outlay.

"This transaction is attractive to us strategically and financially, and puts in place very attractive wholesale relationships for access to Sprint's existing 3G and Clearwire's 4G networks, giving us complete flexibility to introduce wireless mobility in terms of product innovation and deployment," said Comcast chairman and CEO Brian Roberts, in a statement.

Time Warner Cable president and CEO Glenn Britt called the deal "a financially prudent way for us to add mobility to our offerings when our customers demand it."

Hesse: Easier to manage than 'Pivot'
Cable's long-rumored and now official move into WiMax comes just two weeks after Comcast, Time Warner Cable, Bright House, and Cox Communications Inc. severed ties to "Pivot," the wireless voice reseller arrangement with Sprint, citing operational and other inter-company complexities that made the service difficult to scale as a national wireless offering. (See MSOs Pivoting Away From Sprint JV.)

Responding to an analyst question during this morning's conference call, Sprint president and CEO Dan Hesse stressed that the new MVNO structure will be easier to manage than the earlier Pivot reseller arrangement. Additionally, from a technical point of view, it's believed that WiMax can coexist well alongside cable's hardwired, Docsis-based networks, as both are IP-centric technologies. Also, much of WiMax's MAC (Media Access Control) heritage can be traced to Docsis. (See Why Not WiMax?)

Although it took longer than expected for the big WiMax deal to come together, some of the original cable Pivot partners have been dropping hints lately that wireless remained firmly on their longer-term agendas.

First, Comcast confirmed that it had hired former Telefónica O2 Europe chief technology officer Dave Williams to the new post of senior vice president of wireless technology strategy. (See Comcast's New Wireless SVP . Soon after, Britt of Time Warner Cable acknowledged during a quarterly earnings call that his company hasn't witnessed any huge demand for a quad-play, but stressed that what's "more interesting to me is the notion of broadband wireless... and how that might relate to wireline networks." (See Britt: Wireless Broadband 'Interesting' .)

Then there's Cox, the only Pivot cable partner that did not join the new Clearwire venture. Cox, which won valuable spectrum in the recent 700 MHz auction, is expected to build out a wireless network of its own. (See The Great Cable Spectrum Speculation.) Though little is known about the exact timing of that effort and what the wireless service mix will be, Cox reportedly has already signed on Huawei Technologies Co. Ltd. to supply gear for the coming build out. Cable insiders say Cox is expected to move aggressively with wireless, but that it won't be ready to offer services in select markets until sometime next year.

— Jeff Baumgartner, Site Editor, Cable Digital News

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Prepping for the Future: Upskill U Explained
During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (1) comment


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
LRTV Huawei Video Resource Center
UBBS 2016 Highlights

5|12|16   |     |   (0) comments


Highlights of Huawei's UBBS event in Hong Kong.
LRTV Huawei Video Resource Center
European 2020 Digital Agenda

5|12|16   |     |   (0) comments


Anacom's Fatima Barros discusses the plan to bring ultrafast broadband to Portugal by 2020.
Upcoming Live Events
May 24-25, 2016, Austin Convention Center, Austin, TX
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
WiCipedia: Short Skirts & Back-Up Plans
Eryn Leavens, Special Features & Copy Editor, 5/20/2016
Nokia Plays It Smart With Major Mobile Devices Brand Deal
Iain Morris, News Editor, 5/18/2016
Ingenu Revs Up IoT Rhetoric
Iain Morris, News Editor, 5/18/2016
Intel Wants to Be a 5G Player
Dan Jones, Mobile Editor, 5/17/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
The Takeover Begins Click Here
It all started when Mittens taught himself how to use the Internet.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.