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Clearwire: We'll Kick LTE's Butt

Ray Le Maistre
5/7/2008
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There are two things the new Sprint Corp. (NYSE: S)/ Clearwire LLC (Nasdaq: CLWR) WiMax company won't be short of: spectrum and confidence. (See Sprint, Clearwire Create $14.5B WiMax Giant.)

On a conference call today announcing the planned new independent WiMax operator, Sprint CEO Dan Hesse boasted that the new company, with Sprint's and Clearwire's 2.5 GHz spectrum combined, will have a "national footprint" and "the largest spectrum position of any company in the U.S." -- which will leave those mobile operators planning LTE networks playing catchup in the mobile broadband services market.

He added that, because both Sprint and Clearwire have been working for some time towards WiMax service rollouts, the new company, due to be officially formed in the fourth quarter of this year, will be "at least two years ahead of the competition... We have a substantial time-to-market advantage over others who have only just got their 4G spectrum."

That "competition" is AT&T Inc. (NYSE: T) and Verizon Wireless , which recently landed their 4G spectrum and plan to build out networks using LTE (long term evolution), the technology many current 3G mobile operators are planning to deploy from 2010 onwards. (See AT&T & Verizon to Use 700 MHz for 4G .)

While that's some years ahead, both Sprint and Clearwire are believed to be within months of (independently) launching WiMax services. "We can realize [4G services] now rather than years down the road," boasted Hesse, perhaps somewhat prematurely, given Sprint's history of missed Wimax launch deadlines. (See XOHM May Launch This Summer.)

Clearwire has been putting its planned WiMax offering through its paces in Portland, Ore., where, according to Clearwire's CEO Ben Wolff (who will head up the new WiMax venture), the company has been achieving up to 6 Mbit/s downstream and up to 3 Mbit/s upstream in vehicles traveling at 60 miles per hour.

"Based on our experience in Portland, we'll be able to exceed anything that the legacy mobile networks can offer. We aim to provide four times the performance at one tenth of the cost of the legacy wireless networks," stated Wolff, though he didn't comment on how competitive the prices would be.

And Barry West, Sprint's CTO and Clearwire president-elect, believes it will be a long time before LTE is ready to make a true 4G challenge to Wimax. "We expect to see only early trials of LTE in 2010 -- it'll take a lot longer" to get a full network and services up and running, carped West, who, as the video below shows, is keen to press home WiMax's 4G credentials.

Putting Clearwire's plans into action
Now the new company, along with its backers, will start fleshing out its WiMax rollout plans. The "new" Clearwire will have a $3.2 billion purse courtesy of its five strategic investors -- Google (Nasdaq: GOOG), Intel Corp. (Nasdaq: INTC) (through Intel Capital ), and three cable operators, Bright House Networks , Comcast Corp. (Nasdaq: CMCSA, CMCSK), and Time Warner Cable Inc. (NYSE: TWC) -- plus whatever cash Clearwire has when the company is finally formed.

Even with the efficiencies that'll come from the new carrier's relationship with majority shareholder Sprint, which will provide collocation at cell tower sites at preferential rates, IT support, IP transport capacity, and an enterprise-focused sales team, that initial cash pile will likely be used up by mid-2010, by which time Clearwire hopes to have 110 million people covered with its WiMax service.

As a result, Sprint and Clearwire believe the new Clearwire will need further funding of between $2 billion and $2.3 billion, which it will seek "opportunistically" from the capital markets as needed.

If all goes to plan, that would enable the company to fund its initial buildout, which it sees covering up to 140 million people by the end of 2010 and, ultimately, more than 200 million U.S. citizens after that.

That's a plan that will come under intense scrutiny, given Sprint's previous WiMax coverage timelines: In August 2007 it said it would have 19 markets covered with WiMax services by the end of April 2008, and have 100 million within service range by the end of 2008, yet the operator is yet to declare the service available. (See Sprint & Samsung in NYC WiMax Push.)

In the meantime, Sprint has other issues to contend with, including speculation about potential takeover offers and the future of its iDEN network. (See Sprint: 4G & M&A Still Unclear and Sprint 'Committed' to iDEN .)

— Ray Le Maistre, International News Editor, Light Reading

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wap545
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wap545,
User Rank: Light Beer
12/5/2012 | 3:41:20 PM
re: Clearwire: We'll Kick LTE's Butt
Until the new Clearwire deploys a AWS or a White Space based WiMAX network Verizon Wireless LTE network, when deployed, will effectively put them out of business. LTE and 700Mhz will allow VW and AT&T to provide universal true 4G type coverage nationwide.
The New Clearwire will focus on major Metro/Urban markets where they can leverage the Multipath nature of OFDM-Rural will come later if ever in 2.5Ghz..
Nobody is talking about the limitation any Wireless Network based on 2.5Ghz network will have with the absorbtion properties of Foliage in a serious carrier grade Wireless Nationwide network, especially in Rural markets.
Sprint has always focused its Cell (EV-DO) network in major Urban markets and left much of the coverage lacking in Rural areas other then the desert far West.

These folks are using 2.5Ghz because they own it Nationwide and want to get a network underway ASAP, which makes a great deal of financial near term sense.
Intel and the MSO will eventually influence the major players (Sprint and Clearwire) to move off of 2.5Ghz ASAP. The MSO have a great deal of AWS Spectrum that would work nicely with WiMAX and there are many spectrum owners with AWS that would be willing to work with (Partner) the New Clearwire nationwide.
Some one need to ask Intel, on the record, how long it would take them to deploy a AWS, 700Mhz or even White Space based Centrino product for WiMAX.

Jim (aka Jacomo)
lrmobile_jepovic
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lrmobile_jepovic,
User Rank: Light Beer
12/5/2012 | 3:41:16 PM
re: Clearwire: We'll Kick LTE's Butt
At 2.5 Ghz, it's practically line-of-sight to get the bandwidths that Clearwire predict. Plus outside antenna, etc. The laws of physics do apply to Wimax as well.

One could add that LTE will have a huge advantage in terms of terminals. Laptops will surely handle both, but I doubt there will be much interest from the vendors in creating handsets for such a marginal market.

Clearwire will compete from day one with the Wifi & fixed broadband (DSL or cable) combo that most people use today, plus the HSDPA services. They will get 2 years time before LTE arrives, if they can convert slideware into services.

And that's the US, where the spectrum allocation is in Wimax's favor. In other countries, where HSPA is already widespread and the spectrum allocation is less favourable, mobile Wimax has absolutely no chance.

So yes, mobile Wimax is the new CDMA. Except I think it will peak at 2% rather than 20% global market share.
freetoair
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freetoair,
User Rank: Light Beer
12/5/2012 | 3:41:16 PM
re: Clearwire: We'll Kick LTE's Butt
The comparison with LTE has gotten ahead of itself. Theory is one thing - reality is another.

Frankly HSPA is kicking WiMAX's butt right now in terms of subscriber reach and is / will be shown to be competitive with WiMAX in terms of throughput. Show me some real-world, loaded system results for WiMAX .16e? Not there. But it is pretty clear for HSPA.

Verizon/ATT will continue to grow. At least Sprint got XOHM off thier balance sheet (apparently). But now what?

As for Clearwire - big mountain to climb.
Look at Korea for example...KTF HSPA nationwide, KT WiBro in part of Seoul. KTF has millions of subs on HSPA while KT WiBro has a ~150k subs. Upgrade to HSPDA did not require any need site buildouts. Wibro is all new sites.

So Clearwire will spend $B to build out network 2.5GHz - meanwhile HSPA contniues and as Jacomo points out 700MHz is available in the future.

Got to hand it to Intel -- they are the "Hillary" of WiMAX. But at some point you have to face reality.
freetoair
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freetoair,
User Rank: Light Beer
12/5/2012 | 3:41:15 PM
re: Clearwire: We'll Kick LTE's Butt
well said.
AllKindsOfThings
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AllKindsOfThings,
User Rank: Light Beer
12/5/2012 | 3:40:57 PM
re: Clearwire: We'll Kick LTE's Butt
... ah - thanks. I aways wanted to know where the terminology "hllarious" came from ;-)

Clearwire, Nextel and even Intel might be confronted with the results of overly succesfull marketing. They might have put somewhat more on the plate than they can swallow.

Being Icons for their respective US markets does even stand in the way to undersztand that several key proportions of the global market are not today and will also not for the foreseable time be defined by a US centric approaches.
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