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Clearwire Goes It Alone With Faster 4G

Clearwire LLC (Nasdaq: CLWR) is looking to overtake 4G rivals by deploying a data-friendly Long Term Evolution Time Division Duplex (LTE TDD) overlay on its WiMax network that has achieved download speeds exceeding 100 Mbit/s in initial tests.

The catch is that the Kirkland, Wash.-based operator needs to raise "substantial additional capital" before it can say when it might deploy the technology.

"We have not announced a date," a company spokesman tells LR Mobile. "Rollout would be contingent on additional funding."

Nonetheless, Clearwire Chief Operating Officer Eric Prusch was on the company's second-quarter call Wednesday to sell the benefits of an LTE overlay, which would run concurrently with the WiMax network. He said it will cost $600 million to roll out and that "a typical market overlay should take 12 months." The company would deploy the new technology in high-traffic urban areas first.

So, despite the current funding crunch, Prusch says that this is the most economical way to deploy a 4G network with what would likely be cutting-edge download speeds.

That's because of LTE TDD. Time-division networks use one synchronized channel for upstream and downstream signals, rather than the more common frequency division (FDD) technology, which uses two channels separated by a guard band. TDD is well suited for the bursty nature of data traffic, whereas FDD lends itself to voice calls. (See Teeing Up LTE TDD.)

Clearwire would likely be the first major carrier to use LTE TDD technology in the U.S. It has been testing the technology with Huawei Technologies Co. Ltd. in Phoenix for months now. (See Clearwire Plans LTE Tests in the Fall.) The LTE move could potentially help Clearwire get ahead of the pack as the world starts to move to 100Mbit/s "LTE Advanced" next year, says Heavy Reading Senior Consultant Berge Ayvazian. (See Hold On for LTE-Advanced.)

"The key is that Clearwire will be overlaying the LTE TDD on its existing WiMax network, and leveraging its deep spectrum position and participation in the GTI TDD ecosystem with 20-plus other operators to help drive network and device convergence through LTE Advanced beginning in 2012," he says.

He also sees the move as an attempt by Clearwire to get a new bargaining chip in its dealings with majority owner Sprint Corp. (NYSE: S) after Dan Hesse and company inked an LTE deal with LightSquared . (See Sprint's $13.5B Jump to LTE With LightSquared.) "Given the response of Standard & Poor’s and Wall Street to the Sprint/LightSquared deal, the Clearwire announcement to overlay LTE TDD on its existing WiMax network should be viewed as a counter to Sprint's Network Vision," Ayvazian notes.

"Clearwire is portraying Sprint's Network Vision as 'too expensive' and too late. This approach is intended to differentiate Clearwire's plans from LightSquared and enhance their negotiating position with Sprint."

— Dan Jones, Site Editor, Light Reading Mobile

gtchavan 12/5/2012 | 4:57:08 PM
re: Clearwire Goes It Alone With Faster 4G

I don't know about Light Reading, but the rest of know that Verizon and ATT's 4G LTE network is nothing but a scam.  With majority of their back hauls run over T1, T3 and DSL lines, their networks will come to a grinding hault if 10 of Apple LTE devices hapen to be in the one place. 


I don't know about Lighty Reading, but it is obvious to the rest of us that Clearwire is the only guy that can deliver true 4G LTE.  Why? Because we know for a fact that they have 10G ethernet aggregation deployed all over their network for backhaul.  The have more bandwith in one base station than ATT and Verizon have covering all of Cupertino.  Clearwire can run circles around ATT and Verizon every where their network is deployed.  The only thing Clearwire lacks is the capital and here comes Apple with 76 billion in cash.  It is a marriage made in heaven. 


Imagine an Apple network that can dleiver 100meg per device anywhere anytime, with femtocells, picocells, microcells and macrocells generously deployed all over the united states--A network that would say I am Apple I am everywhere. 

digits 12/5/2012 | 4:57:07 PM
re: Clearwire Goes It Alone With Faster 4G

Reaffirms that WIMax will increasingly become a niche tech.


I wonder if the WiMax Forum will become the LTE TDD Forum?

joset01 12/5/2012 | 4:57:06 PM
re: Clearwire Goes It Alone With Faster 4G

Chuck, it's a nice dream but since when has Apple ever shown any inclination to be on the cutting edge of any licensed spectrum wireless technology? Never, that's when.


 

joset01 12/5/2012 | 4:57:02 PM
re: Clearwire Goes It Alone With Faster 4G

What do you think?


 


Seems like Clearwire is definitely offering Sprint another way to get to LTE but will Dan Hesse bite?


Where could CLWR get money otherwise? Could the cable cos invest more?


Or would vendor financing from Huawei or Samsung be attractive if Clearwire can get LTE TDD kicked into life in the US?


 


I'm mulling this all over.

bcon40 12/5/2012 | 4:57:01 PM
re: Clearwire Goes It Alone With Faster 4G

What is missing in this picture?  ~$10 billion is required to build the LightSquared version of an LTE network with all of the risks associated with GPS interference, not to mention the unforseen costs of starting something from scratch.  Is Clearwire saying they can do the same thing for $600 million, or 6% of the cost?!!  In 12 months?  In addition, the headroom of Clearwire's network is substantially greater than LightSquared's.  Why is Sprint going with LightSquared?  Why is the Clearwire stock dropping like a lead weight when they have so much spectrum?  Is something going on behind the scenes that makes sense of all of this?

bcon40 12/5/2012 | 4:56:59 PM
re: Clearwire Goes It Alone With Faster 4G

Thanks for the detailed reply.  Makes sense.  I am also wondering why Clearwire has a market cap of $1.7 billion when I've seen its spectrum alone valued at $5 billion or higher.  Any thoughts?

joset01 12/5/2012 | 4:56:59 PM
re: Clearwire Goes It Alone With Faster 4G

A few things.


Clearwire has already built a network that covers over 130 million people and more than 70 cities in the U.S. LTE TDD is quite similar to WiMax (same backend radio techniques) so they'll get to re-use existing elements for the new network.


LightSquared hasn't built anything out and now Sprint will be deploying the radio infrastructure for them.


CLWR estimates that it should take 12 months to deploy an LTE overlay in an existing WiMax market. I very much doubt they have enough technicians to undertake overlaying the whole network in one fell swoop.


We're probably looking at least two years for a complete update and they'll build out the biggest cities first. Still, it will take Sprint three years to update its network so LightSquared is going to be smaller to start with for sure.


As per Sprint:


There's lots of jockeying for position going on behind-the-scenes here. But the reason that Sprint has picked LightSquared as of now is that LightSquared has money and spectrum to give Sprint to deploy its network. Clearwire has spectrum but NO MONEY as we've just seen.


Also, CLWR's 2.5GHz spectrum footprint is massive but they need major basestation density to get the signal working well indoors. That's why they've gone back and added to the networks in NYC, Seattle and other places.


Don't be surprised if Sprint ends up with Clearwire as a high-speed 4G option on its network after more talks. We should probably know on October 7.


 


Remember also we don't a stock to watch for LightSquared yet. Otherwise it would have taken a horrific battering after the GPS interference issue became clear.


But yeah, $600M sure looks like a decent price for a super-fast network in many of major cities in the US. Why do you think they put that out there? My guess is to see what they can shake off the money tree. Of course that doesn't factor in what it might cost to build out a truly nationwide 4G network.


 


 

joset01 12/5/2012 | 4:56:58 PM
re: Clearwire Goes It Alone With Faster 4G

Flip answer: Market cap never takes into account the value of assets like spectrum. Maybe it should but it doesn't.


At this point in time although CLWR has a massive reserve of spectrum they don't have a clear buyer for it. Sprint can't afford it and T-Mobile is out of the picture. Also, 2.5GHz as good at building penetration as 700MHz so many don't want to take on deployment challenge.


Quite possibly CLWR *should* try and sell some spectrum to fund its LTE push. We'll see...

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