Comments on: Clear WiMAX Network at Wall Street's Mercy

By: Technology news - Techvibes Blog

Technology news - Techvibes Blog — Tue, 06 Jan 2009 22:40:59 +0000

[...] made some enthusiastic plans to upgrade its 46 pre-WiMAX markets in the near future, there has been speculation that upcoming WiMAX deployments might be slowed due to the financial crisis. Clear offers [...]

By: just wondering

just wondering — Fri, 19 Dec 2008 17:15:56 +0000

“However Chris King, an analyst from investment bank Stifel Nicolaus, says that if it does choose to wait, Clearwire could lose out on its 4G first mover’s advantage.”

I’ve seen this argument several times now. It seems to assume WiMAX’s roll out would slow but LTE’s wouldn’t. Why wouldn’t current economic conditions affect the roll out of LTE in the same way? In fact, wouldn’t those carriers be facing the same thing Sprint did — 4G not their core business, it takes a lot of money to launch a new network, business going down (that’s a projection for Verizon et al based on the recession we are facing), so should they invest their money in 4G or in shoring up their core business? Sprint chose the former and spun off its 4G unit to Clearwire. I just wonder how those commmitted to LTE will handle it.

By: techboy2000

techboy2000 — Fri, 19 Dec 2008 07:40:52 +0000

Clearwire’s Wimax data only business model is absurd. Sprint’s decision to drive the company into a brick wall by building another incompatible network is saddening. It is hard to imagine that the much smaller CDMA carrier Alltel was sold for 28 billion recently. Conversely, Sprint’s market cap as of today is 5.1 billion dollars.

By: Dee

Dee — Thu, 18 Dec 2008 14:13:44 +0000

And don’t forget who the partners are – Google, cable companies, Intel – deep pocket group, all with a very large interest in seeing this go big.

By: Paul Kapustka

Paul Kapustka — Thu, 18 Dec 2008 04:32:58 +0000

@Stacey — no, government doesn’t need to make sense. I have no idea how the cash would be made available — maybe just as some kind of tax credit or other accounting trick that nets a savings of a couple billion. Or maybe a loan with some kind of guarantee about being “open” which Clearwire already says it will be.

@Jeff Bean you are spot on, I fully expect to see the major carriers milking the bailout cow as well. Maybe tax credits or somesuch again. But with 700 lawyers, AT&T will surely get their piece of the big handout pie, in some fashion. You could almost guarantee it.

@Stacey re: @Carl’s comment — Portland, Chicago, Dallas, Atlanta, and Las Vegas are new mobile networks Clearwire and/or Sprint was building out; Chicago is apparently ready to go according to all I have heard, and Washington DC should be added to this list too. So I think they do have a lot of networks nearly ready… though no confirmation that this is so. Still, they should be able to get at least several more off the ground this year, new money or not. Remember too they *have* to get some minimum number launched or risk losing the spectrum according to the old merger conditions. Think those are still in place, another thing to check!

By: Jesse Kopelman

Jesse Kopelman — Wed, 17 Dec 2008 22:38:50 +0000

I think people are forgetting that buildout costs are only one part of the picture. The operational expense of a nationwide network is substantial, at least $1B/year. Then there are the costs of acquiring customers, both marketing and device subsidization. Those costs could easily add up to $5B in the first 3 years. I would expect launching a national wireless broadband network to burn through at least $10B in the first 3 years (I’m not counting the cost to acquire spectrum either), likely a lot more. This is why only encumbents are willing to spend big money on spectrum auctions — those billions are just a drop in the bucket compared to what it costs to be a real competitor.

By: W Lee

W Lee — Wed, 17 Dec 2008 19:54:25 +0000

@ Stacey — The markets that Carl referred to are the new mobile WiMAX (802.16m) markets thus no retrofitting is needed. Surely, there are pre-WiMAX markets but they are mostly in rural areas. The new metro-oriented build’s should create market momentum more quickly.

By: Stacey Higginbotham

Stacey Higginbotham — Wed, 17 Dec 2008 19:27:41 +0000

Carl, Clearwire’s existing markets are pre-WiMAX and will need an upgrade.

Paul, if the government gave money for this, then there would be all sorts of conditions is my bet. Filtered Wi-MAX anyone? Conditions on when and where it’s deployed? Given that other private comapnies have invested such a shift midstream seems kind of unfeasible. But politics doesn’t have to make sense I suppose.

By: Stacey Higginbotham

Stacey Higginbotham — Wed, 17 Dec 2008 19:22:11 +0000

Ross, thanks. Fixed.

By: Ross

Ross — Wed, 17 Dec 2008 19:14:43 +0000

Stacey,

You have a typo:

“$3.2 million invested in the venture by Google and cable companies”

That should be billion with a B

By: Jeff Bean

Jeff Bean — Wed, 17 Dec 2008 17:58:08 +0000

A billion here, a billion there. Cash is king.

Can they do it? I hope so.

Will the incumbent carriers and cable operators stand idly by? No way.

By: Paul Kapustka

Paul Kapustka — Wed, 17 Dec 2008 17:22:34 +0000

Just wondering — what if Clearwire, like other carriers, gets some federal bailout money? Compared to what’s being asked for from Detroit, an extra $3 billion to build out a third pipe seems like small potatoes. And Clearwire has pretty good political support these days. Just wondering.

By: The Toybox mobile edition

The Toybox mobile edition — Wed, 17 Dec 2008 17:01:15 +0000

[...] problem, of course, is that delays the company’s profits considerably — according to one analyst, all the way until 2015. Related [...]

By: Dee

Dee — Wed, 17 Dec 2008 16:52:27 +0000

For some reason it appears to me there is a concerted attack on Clearwire & Sprint lately. BusinessWeek, WSJ, etc. Makes me think someone is concerned about the 4G deployment pulling their customers away.

By: Rick

Rick — Wed, 17 Dec 2008 16:23:27 +0000

How about the positives! Interest rates are at all time lows.

By: Carl

Carl — Wed, 17 Dec 2008 16:15:53 +0000

Clearwire has plenty of money. The Portland, Chicago, Dallas, Atlanta, and Las Vegas networks are essentially already built. Sure they will eventually need more funding, but they have a long way to go. Pickybacking off of Sprint’s 3G network by offering dual-mode devices will only help drive subscribers.