Nothing confusing about Clearwire's retail/wholesale mix -- if you take the time to think
Despite what you may have read recently at other online outlets, Clearwire LLC (Nasdaq: CLWR) has made no radical switches of late to its business plans, continuing on its current course of providing both retail and wholesale versions of its WiMax wireless broadband service.
While rumors can and will start anywhere, in most cases all it takes is a quick call or an email to the company involved to get the most basic take on whether something is true or not. Thankfully, Dear Reader, we took the time for you and got this response from Clearwire about rumors that had the company ditching its retail operations in favor of an all-wholesale strategy:
- Clearwire remains committed to our retail business through our company owned retail stores, indirect dealers and national retail outlets. We are also supporting our wholesale partners, Sprint, Comcast and Time Warner Cable, in their 4G offerings as we have been since they launched their first products in 2009. We've been fully focused on developing both our direct and wholesale business since launching our 4G network more than a year ago.
It just doesn't make any sense, and anyone who thought it did (or blindly repeated the idea without question) should probably be crossed off your list of places to look for industry information.
While Clearwire's wholesale partners may at some point produce more actual network users than Clearwire itself, is that really any surprise given the resources of each of the players? Despite its economic woes, Sprint Corp. (NYSE: S) remains one of the three largest cellular providers in the country, with a marketing budget that includes sponsorship of NASCAR. And when a Comcast Corp. (Nasdaq: CMCSA, CMCSK) goes shopping, it puts things like NBC into its acquisition bag. So yes, it's possible that Clearwire's wholesale partners might reach a larger audience faster than Clearwire itself, since even with a few billion in funding, Clearwire remains a small startup in the world of national service providers.
But how is that a bad thing or a shift in focus? In a recent interview at CES, Clearwire chief marketing officer Mike Sievert contended that the mix of retail and wholesale was nothing but an advantage for Clearwire, since it gives the company multiple avenues for potential customer acquistion, from different client bases.
"Every [partner] provider has a different value proposition, and some brands will appeal to some and not to others," Sievert said. "So even if one brand doesn't work, we've got other ways to get a crack at getting the user. I don't think that's fully appreciated."
And while Sievert himself said that wholesale might become a bigger piece of the pie over time -- "if you look at the partners, we're the smallest of four or five big national brands" -- he also takes great pleasure in the company's street-fighting retail attitude, as in Vegas where it has folks standing on sidewalks with signs trying to get foot traffic into its Clear stores... Again, not the kind of actions of a company giving up the retail game.
"I love stuff like that, getting out and introducing ourselves to customers," Sievert said. "We like to do local events, get feet on the street. Nobody's got a bigger stake in this than us."
— Paul Kapustka is the founder and editor of Sidecut Reports, a WiMax analysis site and research service. He can be reached at [email protected]. Special to Unstrung.