Light Reading
Analysts estimate that it could cost up to $12B to deploy a mobile WiMax network in 50 markets in the US

Can Clearwire Do It?

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
5/8/2008
50%
50%

Even with a fresh $3.2 billion in its funding chest, can the "new" Clearwire LLC (Nasdaq: CLWR) really afford to finance its ambitious mobile WiMax plans in the U.S.?

Analysts estimate it could take up to $12 billion, including backhaul costs, to fully deploy mobile WiMax in 50 U.S. markets. Clearwire says it wants to focus on the top 100 markets, using the so-called 4G mobile WiMax technology, filling coverage gaps with 3G. On paper, this would provide wireless broadband coverage for between 120 million and 140 million people and more than 200 million people beyond 2010.

Google (Nasdaq: GOOG), Intel Corp. (Nasdaq: INTC), and a posse of cable companies are pumping in the $3.2 billion, and Clearwire CEO Ben Wolff has said that the company could look for another $2 billion to $2.3 billion sometime in 2010. (See Clearwire: We'll Kick LTE's Butt.)

That adds up to $5.5 billion, roughly half the $11 billion to $12 billion that Technology Business Research Inc. (TBR) analyst Ken Hyers estimates it would cost Clearwire to deploy a mobile WiMax network with supporting backhaul in 50 markets in the U.S.

Hyers bases his estimate on the roughly $1.5 billion per quarter that AT&T spent on deploying its upgraded 3G network. He believes it is "reasonable" to expect Clearwire's build-out costs to reach $1.5 billion to $1.8 billion per quarter for at least 18 months to reach 50 markets.

"That's a realistic number," agrees Phil Solis, principal analyst of mobile broadband at ABI Research .

Sprint Corp. (NYSE: S) has three markets in a soft-launch phase -- Chicago and Baltimore-Washington -- and expects them to go commercial late in the third quarter or early in the fourth. Clearwire has mostly talked up its WiMax deployment in Portland, Ore., which should go live in the second half of this year. (See Clearwire: In Depth With Barry West.)

Sprint has already been tripped up by the need for faster backhaul for WiMax. The operator delayed its initial Xohm launch in April as it continues to build microwave links for the network.

Neither Clearwire nor Sprint returned calls to comment on the potential costs of WiMax deployments.

Sprint originally said it expected to spend $5 billion deploying WiMax through 2010, with $2 billion earmarked for 2008. The original Clearwire partnership was supposed to shave some of that cost. (See Sprint Goes WiMax.)

Clearwire was spending big even when deploying its fixed wireless "pre-WiMax" network in the U.S. over the last couple of years. In May 2007 documents, for instance, Clearwire revealed capex spending of $74.4 million during the first quarter of 2007. (See Clearwire's Cash Craving and Clearwire: The Big Spend.) Clearwire's shares dropped 9 percent to $14.76 today after yesterday's ramp-up as Citigroup downgraded the stock to a Sell, citing network costs, coverage, and competition as issues for the venture.

— Dan Jones, Site Editor, Unstrung


Interested in learning more on this topic? Then come to Backhaul Strategies for Mobile Operators: Europe, which will provide a unique perspective on the progress that Europe's carrier and vendor community is making in relieving the so-called "backhaul bottleneck" in mobile networks. To be staged in London, June 26, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.


(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
The New Wave of IP + Optical Integration

11|21|14   |   04:29   |   (7) comments


At the Alcatel-Lucent Technology Symposium, Heavy Reading senior analyst Sterling Perrin talks about how SDN has reshaped the discussion around packet and optical integration.
LRTV Huawei Video Resource Center
Huawei Highlights at BBWF 2014

11|20|14   |   3:40   |   (1) comment


Broadband World Forum is one of the world's largest telecoms, media and technology events with over 7,800 senior executives from across the globe converging on Amsterdam every year to identify the Next Big Thing. BBWF is an exciting place to meet the entire industry under one roof and identify the latest in network innovation, service optimization and customer ...
LRTV Huawei Video Resource Center
How Will BCMS Stimulate Margin for Broadband Operators?

11|19|14   |   6:52   |   (0) comments


In BBWF 2014, Liu Shuqing emphasizes the value of FMC 2.0 based full service experience by throwing light on the BCMS solution. The underlying principle of this innovative technique is to create network robustness and driving network from connection oriented to ACE – BAND oriented infrastructure, in which applications, cloud, and user experiences will be an asset ...
LRTV Huawei Video Resource Center
SingleFAN3.0: Better Connected Experience

11|19|14   |   3:06   |   (1) comment


At the BBWF 2014, David Hu, the VP of Huawei Access Network Product Line, talked about the future of access networks – SingleFAN3.0: faster broadband, wider coverage, and smarter connection.
LRTV Interviews
Basil Alwan Interview: The Road to Cloud

11|19|14   |   09:09   |   (0) comments


Alcatel-Lucent's head of IP and Transport talks about the migration towards a web-like networking environment, the impact of the cloud, SDN and NFV, and the yet-to-be-announced FP4 chip.
LRTV Documentaries
FairPoint Makes a Fair Point About Analytics

11|19|14   |   1:56   |   (1) comment


The US-based communication service provider gets to grips with advanced analytics, tackling data and breaking down the silos within its own business.
LRTV Documentaries
Analytics Lets C Spire Get to Know Subs

11|19|14   |   3:01   |   (2) comments


It's all about the data for US operator C Spire as it uses analytics to personalize its customer service down to individual subscribers.
LRTV Interviews
Nuage Branches Out With SDN: CEO Interview

11|17|14   |   9:32   |   (0) comments


Sunil Khandekar, CEO of Alcatel-Lucent's SDN-focused unit Nuage Networks, talks about the opportunities and challenges of breaking out of the data center into wide-area networks.
Light Reedy
Telecom Analytics Grows Up

11|14|14   |   1:15   |   (4) comments


The big data analytics debate has moved on from a year ago, with some experts suggesting it's no longer a technology challenge.
LRTV Huawei Video Resource Center
Huawei Compass

11|14|14   |   3:17   |   (1) comment


At OpenStack Summit 2014, Shuo Yang, Huawei Principal Cloud Infrastructure Architect introduced Huawei Compass, the software tool for solving customers' problems on the journey of OpenStack Cloud.
LRTV Huawei Video Resource Center
Huawei's Cloud Strategy in European Region

11|14|14   |   2:56   |   (1) comment


At OpenStack Summit 2014, Dr. Gotz, CTO of Huawei IT in European Region introduced Huawei's cloud strategy in European region.
LRTV Huawei Video Resource Center
Huawei's Contribution on OpenStack

11|14|14   |   5:58   |   (0) comments


At OpenStack Summit 2014, Dennis Gu, Huawei Chief Architect of Cloud Computing introduced the relationship between OpenStack and cloud computing, and Huawei's contribution on OpenStack.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 8-10, 2014, Reykjavik, Iceland
February 12, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
Irish Telecom outlines the rise of VoIP technology, including its adoption within businesses and their perception of its quality.
Hot Topics
Bell Labs Chief Slams 'Toy' Networks
Robert Clark, 11/19/2014
$38.3M: Ain't That a Kik in the SMS
Sarah Reedy, Senior Editor, 11/20/2014
Do You Have a 2020 Vision?
Dennis Mendyk, Vice President of Research, Heavy Reading, 11/21/2014
The New Wave of IP + Optical Integration
Ray Le Maistre, Editor-in-chief, 11/21/2014
Google, AT&T, BT Unite on Network Data Models
Carol Wilson, Editor-at-large, 11/20/2014
Like Us on Facebook
Twitter Feed