Light Reading

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        ADD A COMMENT
Flash Poll
From The Founder
Anshul Sadana answers questions from Steve Saunders, Light Reading's founder and CEO, about Arista's CloudVision, a global cloud network controller for workload orchestration and workflow automation delivering a turnkey solution for cloud networking.
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Between the CEOs
Video Exclusive With Basil Alwan, Alcatel-Lucent

7|24|15   |   26:44   |   (5) comments


Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
LRTV Custom TV
VDF: Enable the Financial With Mobile Money

7|20|15   |   06:53   |   (0) comments


Ian Ravenscroft discusses how operators can expand to occupy the entire digital services value chain through service innovation.
LRTV Custom TV
Telefónica on OSS Transformation

7|20|15   |   06:01   |   (0) comments


Jose Gonzales discusses the details of Telefónica's operation transformation program.
LRTV Custom TV
Judi Achmadi on Huawei's Cloud Storage Solution

7|20|15   |   03:33   |   (0) comments


Judi discusses the key business goals of TelekomSigma's public cloud service and how Huawei's solution helps them address challenges.
LRTV Custom TV
KPN Enlightening Digital Business & IT Transformation

7|20|15   |   06:19   |   (0) comments


Rob de Beer discusses the changes that operators need to make with service innovation now coming from the Internet world.
LRTV Custom TV
Stratus Telco-Grade Cloud Solutions & NFV

7|20|15   |   07:34   |   (0) comments


Ali Kafel from Stratus Technologies addresses high-availability concerns within the telco industry with a solution that enables telcos to provide high-availability and stateful fault-tolerance using a software-based approach.
LRTV Documentaries
The Six Million Dollar Business Man

7|20|15   |   01:52   |   (0) comments


Steve Saunders, publisher. A man barely alive after an acquisition malfunction imploded the company he founded. Gentlemen, we can rebuild Light Reading. Better, faster, stronger.
Between the CEOs
CEO Chat With Anukool Lakhina, Guavus

7|20|15   |   38:51   |   (1) comment


Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
LRTV Custom TV
IBM's Flash Storage With Intel QuickAssist

7|20|15   |   03:18   |   (0) comments


Intel's Bev Crair and IBM's Eric Herzog discuss how IBM's V9000 Flash Storage System has helped customers around the world. Featuring real-time compression powered by Intel QuickAssist Technology, the V9000 is a next-gen flash storage solution.
LRTV Huawei Video Resource Center
Thailand's AIS: Transforming to an FMC Operator

7|17|15   |   4:53   |   (0) comments


Saran Phaloprakarn, Senior VP of Fixed Broadband Business Management of Thailand's AIS, was a keynote speaker at the first Asia-Pacific Ultra Broadband Summit in Bangkok. In this video, he talks to Heavy Reading about transforming into an FMC (FBB+MBB+Content) operator.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Network operators start seeing savings from NFV in the first year, according to a study by Affirmed Networks and ACG.
Hot Topics
Robbins Succeeds Chambers as Cisco Changes CEOs
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/27/2015
Cable Feuds With Senate Dems Over STBs
Alan Breznick, Cable/Video Practice Leader, 7/31/2015
RJio to Launch Its Own 4G Devices Brand
Gagandeep Kaur, Contributing Editor, 7/27/2015
Easing the Tech Pains for the Homeless
Carol Wilson, Editor-at-large, 7/28/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
Cats with Phones
Comes With Free Phone Stand Click Here
Who says cats don't have any skills?