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Summary:

For Clearwire, 2010 is the year it makes it or breaks it. As part of its annual results today Clearwire said it will triple its number of subscribers this year. To do that it will cover 120 million people and spend up to $3.2 billion.

Clearwire today reported fourth-quarter and 2009 results showing how heavily the carrier is spending to gain customers. As part of its efforts to triple its subscribers this year,  Clearwire reiterated its plans to cover 120 million people by the close of the decade and said it will spend up to $3.2 billion. For Clearwire, 2010 is the year it makes it or breaks it.

After this year, not only will other carriers start heavily promoting their own 4G service, but some $2 billion of Clearwire’s debts will start to come due, up from $586 million in payments it’s obligated to make in 2010. Plus, Wall Street needs fast proof that Clearwire and Sprint didn’t bet on the wrong technology. Everyone is waiting for them to fail.

But despite our skepticism about WiMAX vs. the Long Term Evolution mobile broadband that carriers like Verizon and AT&T are deploying, Clearwire does have two opportunities to survive. The first is if it can sign up a lot of customers quickly on the network, through aggressive promotion and pricing.

When I tested WiMAX in Austin, I was frustrated by the giant holes in coverage, but where there was coverage, it was a much better downloading experience than 3G. Given that Clearwire uses Sprint’s 3G network to blanket those holes, the service isn’t a bad deal. With its cable partners promoting it and most consumers unaware of the differences between WiMAX and LTE, there’s a market for fast, which Clearwire will certainly provide. T-Mobile is hoping to take advantage of this with its HPSA+ rollout as well.

The other advantage Clearwire has is spectrum. For more on the importance of spectrum check out our report, Everybody Hertz: the Looming Spectrum Crisis on GigaOM Pro (sub req’d). The company has up to 120 MHz of spectrum available and is currently deploying its WiMAX service in large, 30 MHz chunks which it can fill with customer’s bits. In contrast, those deploying LTE in the 700 MHz band will use 10 MHz chunks, which can’t offer the same capacity. For now, it means Clearwire doesn’t have a data cap and can offer a better user experience even as more customers join the network.

So can Clearwire deploy quickly, get customers, and then keep them as its competitors roll out LTE? If so, finding success with WiMAX may not be an impossible dream.

Image courtesy of Flickr user omniNate

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  1. I am using Clearwire in Mountain View, CA (on the developer network) and I’m getting about 14 Mb/s down and 2 Mb/s up.
    So far its great!

  2. “Everyone is waiting on them to fail” Indeed. While LTE may have countless superior technical merits, “later this year” is a very long time in technology. The tone of a lot of press on Wimax carries the implication of “until they get eclipsed by LTE”, and cite someone’s coverage issue.

    It’s hard to imagine not being able to say the same thing about Verizon’s LTE coverage in (4, 6, 12, 18) months – and even harder to imagine that 4G service from them will be price-competitive with Clearwire’s current plans. Here’s hoping they co-exist for a very long time.

  3. A tip for everyone here – in a year or less people will realize Wimax vs. LTE is not relevant, the 2 will coexist in mobile devices (and on core networks) sooner than you realize as CDMA and GSM do now. The combined Wimax-LTE market will be way more attractive to device makers than either one on it’s own (espcially globally) and Wimax has indeed gotten the head start it needed. These guys are dangerous because they enter the market without concern over cannibalizing anything across a large established customer base and can deploy the network quicker because their spectrum position allows for microwave backhaul vs. fiber, cheaper and they can hang an antenna and be done vs. waiting on a LEC to deliver fiber.

  4. I think it’s relevant to ask whether or not they are competing for the same customers — whether there is some mythical fixed 4G title that only one provider will win. Or whether the overall market, especially those who use phones as their main Internet device, is still growing?

    Even if Clearwire stays smaller, isn’t there room for them in the market? Especially since with their spectrum advantage they will likely always be able to have a better bandwidth for the buck offering vs. LTE?

    1. I don’t see 4G and phones for a while, which is why T-Mo’s HSPA+ is interesting. I also hope and have faith that as a consumer I will win because of the dueling 4G technologies.

      1. HTC Supersonic? (still in the rumor category, though)

      2. Not even VoLTE phones as a bundled offering to enhance the “phone, internet, and tv” bundles that the carriers market effectively right now? Seems that they would be pushing hard to make this happen given the lack of a clear business model for data services across connected devices.

        My opinion, we need wimax and LTE to co-exist so that we have more market competition.

  5. Mobile Internet Solutions » Clearwire Races to Grab 4G Customers Wednesday, February 24, 2010

    [...] Clearwire Races to Grab 4G Customers tweetcount_url='http://www.mobileinternetsolutions.com/wordpress/2010/02/clearwire-races-to-grab-4g-customers/';tweetcount_title='Clearwire Races to Grab 4G Customers';tweetcount_cnt=0;tweetcount_src='RT@mobileinternets';tweetcount_links=true;Stacey Higginbotham, GigaOM, 2/24/2010 [...]

  6. The LTE devices will probably be inexorably bound to the carriers bad practices of old. Clearwire with Intel’s support in the enabling CPE will make attaching any device easy, with the most flexible terms.

    What we have come to expect with our PC hardware, somehow, the mobile network operators have had some success in training us to expect less.

    In that case, LTE has almost nothing real to offer over Clearwire.

  7. At least you admit your bias/skepticism ,,,,guess that is a start.

  8. Clearwire’s Big Bet on Our Broadband Addiction – GigaOM Friday, March 12, 2010

    [...] Mar. 12, 2010, 9:00am PST No Comments            0 Despite doubts about Clearwire’s ability to compete against the coming rival 4G network of Verizon and AT&T, its users are apparently pleased with [...]

  9. Mobile Internet Solutions » Clearwire’s Big Bet on Our Broadband Addiction Monday, March 15, 2010

    [...] doubts about Clearwire’s ability to compete against the coming rival 4G network of Verizon and AT&T, its users are apparently pleased with [...]

  10. LA, Miami and Middle America to Get WiMAX – GigaOM Tuesday, March 23, 2010

    [...] 3G coverage to supplement Clearwire’s 4G coverage in the regions. The two companies are in a race to sign up mobile broadband subscribers before the cellular operators launch their own 4G networks, based on the Long Term Evolution [...]

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