Light Reading

Can Clearwire Do It?

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor

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        ADD A COMMENT
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Delivering Service Agility in the Virtualization Era

11|25|15   |   5.41   |   (0) comments

Interview with Massimo Fatato, WW OSS Business Lead, Hewlett Packard Enterprise.
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (7) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (1) comment

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
LRTV Custom TV
Making Pay-TV User Experiences Millennial-Friendly

11|16|15   |   6:42   |   (0) comments

The unique challenge of reaching and engaging Millennials is driving pay-TV video experience transformation that can include higher quality UIs, viewing of multiple content streams at once and seamless transitions between handheld devices and the television.
LRTV Huawei Video Resource Center
Huawei Electric Power Summit 2015 – Addis Ababa, Ethiopia

11|16|15   |   1:28   |   (0) comments

Huawei, together with Ethiopia's Ministry of Water, Irrigation and Electricity, hosted the Huawei Electric Power Summit 2015 in Addis Ababa, Ethiopia. The event gathered industry experts and senior executives of global electric power companies to discuss emerging industry trends including: improvements in new energy conversion efficiency, reduction of line losses ...
Allot MobileTrends Report H2/2015 reveals how daily online behavior can be used to discover smarter ways to profile customers and propose valuable, real-time offers to them.
Hot Topics
Samsung to Sell Wireless Networking Unit?
Dan Jones, Mobile Editor, 11/23/2015
Sprint, Verizon Face Reorganization, Job Cuts
Dan Jones, Mobile Editor, 11/20/2015
Sprint to Get $1.2B From New Leasing Venture
Dan Jones, Mobile Editor, 11/23/2015
How Might Open Source Fail?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/24/2015
Frontier Gives Telco TV a Boost
Mari Silbey, Senior Editor, Cable/Video, 11/24/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Mobily CEO Ahmad Farroukh talks to Steve Saunders about the realities of being a mobile operator in Saudi Arabia.
Cats with Phones
Can't Find the Phone on Thanksgiving? Click Here
Check under the cat! (hint: bottom right)
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.