This Week in WiMax
With Verizon Wireless and AT&T Inc. (NYSE: T) struggling to find mobile pricing plans that work, Clearwire LLC (Nasdaq: CLWR) should strike with lower, simpler schemes.
Since I'm not responsible for profit and loss statements, it's easy for me to say things like "Clearwire should reduce its prices and have one or two simple plans, across all its U.S. markets." While I understand that revenues are important, this seems to be one of those moments when a startup should put the bottom line aside in favor of increasing its user base, since competitors are clearly struggling to keep up with demand for mobile services.
The proof point of this argument is Verizon and AT&T's recent gymnastics over how they will price mobile data plans going forward. AT&T's Ralph de la Vega caused a big stink back in December, when he floated ideas about metered billing and the need to "educate" iPhone customers on how not to use their phones so much. Today Verizon made official some new plans that increase what most folks will pay for data services, and its CTO was quoted last week saying that per-bit pricing plans will likely be a part of Big Red's Long Term Evolution (LTE) services, if and when they appear later this year.
What these twists and turns really mean is that both big telcos see a looming crisis on the horizon, one where they simply don't have enough bandwidth to meet user demand. Jacking up prices is one way to limit usage, but throw the rumored Apple tablet into the mix and what happens to the big networks then? Over on Clearwire's expanding network, meanwhile, there's lots of bandwidth room and not so many users right now. Yet a visit to a couple Clear retail outlets in Las Vegas during CES saw a jumble of promotions and signage, including a guy on a street corner with a big green cardboard arrow pointing to the Clear store.
While such street tactics might be effective at getting feet into stores on a local level, what Clearwire needs right now is a national pricing effort that is simple and strikes directly at the bandwidth crunch faced by the big telcos. Why not try a "nationwide unlimited" plan for $20 a month for one year? That simple message would trump the whole confusing laundry-list of data/email/voice pricing that makes cellular services so frustrating to buy right now. And though you might lose a little bit of money on each user, think of it as pre-marketing expenditures to attract a wider audience for the hybrid WiMax smartphone Clearwire and Sprint Corp. (NYSE: S) will offer later in the year.
Again, it’s not my budget, so easy for me to make that call. But if you've got a stadium full of beer while the other guys are offering just a few cans, it seems to make sense to find a way to get more people to join the party.
Need to know more about Clearwire and WiMax? Our second version of the Clearwire NTK report, which covers Clearwire events from June through September, costs less than a large beer at the local Sprint Nascar race. Just $4.95 at the Sidecut store. Also available for the Kindle. Available now for free download is our WiMax Business Deployment Guide.
— 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.