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Summary:

What do they say, in for a penny, in for a pound! Make that in for a million, in for a billion. Craig McCaw’s Clearwire keeps getting more money. Intel and Motorola ratched up their investments in the fixed wireless company up by about $125 million, […]

What do they say, in for a penny, in for a pound! Make that in for a million, in for a billion. Craig McCaw’s Clearwire keeps getting more money. Intel and Motorola ratched up their investments in the fixed wireless company up by about $125 million, pushing the total funds raised by the company to a whopping $1.1 billion. As you may remember, the company had raised $900 million in early July. Arvind Sodhani, president of Intel Capital, and David Perlmutter, senior vice president and general manager of the Intel Mobility Group, to its board of directors. (Clearly they still have their day jobs!)
It is easy to understand why Motorola is investing in the company. Craig McCaw has done right by them in the past, and the company is in the wireless business. Intel is pushing hard on WiMAX and everything fixed wireless. But that’s all that there is to it. Are they being storm chasers again? Intel had also gone after the hosting business when it was hot – expensive exercise.

Intel despite all its posturing hasn’t really shown its communications chops…. at least yet. It made a lot of communications investments in the 1990s that did not real go anywhere. They spent a lot on WiFi, but Atheros, Broadcom and others still seem to be doing well. Wireless, or at least the easier availability should in theory prompt greater usage of non-PC devices, a business where Intel again has failed to sizzle. Will WiMAX drive PC sales – the only business which is still making money for Intel?

Still, McCaw knows he is in a catbird seat. Clearwire owns licensed spectrum in the 2.495 to 2.690 GHz band and has the second largest spectrum position in this band after Sprint Nextel. Which could prove long time reader Jesse Kopelman right. In response to a previous Clearwire post he wrote: “I think Sprint will end up buying this one eventually, too.” Sprint bought Craig McCaw-backed Nextel. And if that happens, then we will buy Jesse a round of beer.

  1. Om,

    I am very curious about something.

    First of all, you have to really hand it to McCaw for re-inventing himself. This guy is amazing!

    Secondly, whatever happened to the McCaw / Gates joint venture in the sky once known as Teledesic? Remember that everyone was getting hyper about seven years ago about Teledesic low orbiting high power satellites? We don’t hear anything about Teledesic anymore but I thought for sure that McCaw was in on that gig.

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  2. a blog for mobile workers…

    Web Worker Daily is an interesting new blog from the GigaOm stable, aimed squarely at people for whom their laptop and mobile phone are more the office than the physical building with that name. I’m a great fan of the concept of mobile working (as op…

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  3. And, AT&T (now Cingular) was also a buyer of Mr. McCaw’s business! I’m sure he has a few opportunities to go in that direction too…not just Sprint’s way (as Jesse Kopelman states)…

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  4. Where are the subscribers going to come from? Its not like people are going to switch off their much faster DSL or cable service in favor of wireless just because. Underserved areas obviously exist and wireless fits well, but why are these area underserved in the first place? The CAPEX for wireless may be better than competing technologies in rural markets, but there is still CAPEX and there has to be a large enough market opportuntity. One billion dollars is a large investment to pay back.

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  5. I really like seeing the money being poured into the wireless sector. Once people begin to see the potential of accessing the Internet via their mobile, they’ll dive in given the right price point. The risk for these companies is having their infrastructure become obsolete before it leaves the launching pad.

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  6. I am with Matt on this. I don’t see where the subs come from in large enough numbers to justify the investment given the footprint of DSL and Cable. They have a business in underserved rural areas, but many of the rural LECs in these areas have been very aggressive w/DSL knowing they have a virtual monopoly. Plus, they don’t have any ability (yet) to bundle voice and TV.

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  7. This will not compete with DSL/fixed wireless services. Consider it as a $24.99 service given to your laptop through a PCMCIA card. Currently I pay $39 to T-Mobile just to get connection in Starbucks. I would be more than happy to get a area-wide coverage and still keep my DSL for home.

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  8. Clearwire’s service is not a mobile service currently. Could they upgrade to mobile WiMAX? Sure, but how much will that cost? Why not buy 3G service from Sprint now and get mobile WiMAX later?

    For more information on Clearwire’s CPE device, see the following URL:
    http://www.nextnetwireless.com/assets/specsheets/RSUrev7.pdf

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  9. Jerry, those McCaw guys generally all left AT&T Wireless and went to work for Nextel (and thus now work at Sprint). I don’t see the incestuous cycle being broken.

    An interesting thing I noticed now that the FCC has made it easier to see who EBS (former ITFS) spectrum is being leased to is that Clearwire is picking up relatively small pockets of spectrum in the same markets that Sprint has vast holdings and is likely to offer service. Does Clearwire really intend to go head to head or is this just some leverage to force better roaming terms and the eventual Sprint buyout (McCaw always has selling the company as his long-term strategy)?

    Om, you still owe me Blue Label. How’d I get downgraded to beer?

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  10. Okay Jesse if you are right, then its blue label for you. you might have to fly out to california. by the way where is charlie sierra. man we are missing his insights.

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