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It has been an interesting year for Clearwire to say the least. The company, that is the visible and most vocal champion of the WiMAX technologies in the U.S. may move away from the technology which is the underpinning of its nationwide network.

It’s been an interesting year for Clearwire, to say the least. The company, which is the visible and most vocal champion of WiMAX technologies in the U.S., may move away from the technology which is the underpinning of its nationwide network. After reporting weaker-than-expected earnings, the company added that it was trying out two different flavors of LTE or Long Term Evolution wireless broadband technology in Phoenix. This trial would allow the company to assess any and all options about the future choices it makes when it comes to wireless broadband technologies.

“The part of the trial is to future-proof our network, and we have to look ahead and do the proper due diligence and see what is the best way to utilize our spectrum,” Mike Sievert, chief commercial officer with the Kirkland, Wash.-based company said in a chat with me after the company finished its conference call with analysts. Clearwire will use FDD-LTE technology for a Phoenix-based trial network that will be allocated 20 MHz up and 20 MHz down in spectrum. Sievert boasted that the abundance and kind (2.5 GHz) of spectrum gives Clearwire the ability to be flexible and have hybrid network architecture.

Clearwire, thanks to its deal with Sprint is sitting on a lot of spectrum, which indeed gives it more flexibility in terms of network technologies. It can also sell off some of that spectrum and plow back the money into its network. When I asked Sievert, he said selling parts of the excess spectrum is “one of the options” and something that could be used as an alternative source of capital for its network buildout.

ms10_lte_2h09_chart.jpg Sievert’s comments and Clearwire’s trials indicate that the WiMAX might be losing traction in the U.S. One of Clearwire’s major backers — Intel Corp., which has funneled more than a billion dollars into the company — has been hit in the face by continuous losses on its WiMAX investments. The chipmaker apparently has closed its WiMAX office in Taiwan. Perhaps even Intel is losing patience with the technology. According to Infonetics Research, WiMAX equipment and device revenue was down 2 percent in the first quarter of 2010 to $303 million.

One of the reasons why WiMAX has been slow to grow in the U.S. has been the lack of devices. Till the release of HTC Evo on the Sprint network, there hasn’t been a killer device to boost demand for the WiMAX-based 4G network. Sievert said that the addition of Evo helped with the growth during the second quarter which saw the network add 722,000 net new connections.

Clearwire ended the second quarter with 1.7 million total subscribers consisting of 940,000 retail subscribers and 752,000 wholesale subscribers. During the second quarter, Clearwire added 722,000 total net new subscribers including 127,000 retail additions and 595,000 wholesale additions. This dramatic increase in wholesale subscribers includes users of multi-mode 3G/4G devices in areas where the Company has not yet launched 4G service but from whom it receives nominal revenue. As of June 30, approximately 52% of the company’s wholesale subscribers resided outside of Clearwire’s currently launched markets. (Clearwire Press Release)

According to Sprint, a partner of Clearwire, it sold 50,000 Evos in the first weekend of availability. It’s hot devices like Evo that will help Clearwire expand its footprint from small regional pockets to a more national audience. The company expects to add more devices in order to boost growth in the coming months. Will that be enough?

Already, LTE-based networks are starting to pop-up everywhere, and LTE suppliers are likely beginning to see scale that is larger than WiMAX. A larger variety of LTE-based consumer devices will the tip the scales in favor of LTE. In the U.S., Verizon will launch its LTE-based network in November 2010. According to Infonetics, the number of LTE subscribers is forecast to reach 153 million by 2014 and the LTE infrastructure market is forecast to reach $11.4 billion by 2014. LTE will be deployed on a dozen live networks by the end of 2010.

news20100805-1.gif According to Telegeography, out of a global total of 5.7 million subscribers, there are 1.4 million WiMAX and pre-WiMAX subscribers in North America. In a report released today, the company said:

The Asia-Pacific region has overtaken North America as the home to the largest number [of] 4G broadband wireless subscribers. According to figures from TeleGeography’s 4G Research Service, there were around 1.7 million pre-WiMAX and WiMAX customers in Asia at the end of March 2010 compared to 1.4 million in the US and Canada. With the global 4G subscriber total standing at more than 5.7 million, the Asia-Pacific region now accounts for 29 percent of the overall market, up from 22 percent a year earlier and just 6 percent at the end of 2006.

 Although all areas are experiencing 4G subscriber growth, WiMAX technology is proving particularly attractive to operators in Asia. It is relatively cheap to deploy and can bypass the last-mile fixed access networks, which in many cases are still dominated by the incumbent operators.

Related GigaOM Pro Research (sub req’d): For Operators who bet on WiMAX, there’s an LTE Plan B

By Om Malik

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  1. I stopped betting on WiMax a while ago. Yes, Intel backing away was pretty good motivation.

    I think the LTE trials are confirmation of the direction Clearwire and their peers are going.

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  2. as a user of computers and technology i find it disappointing that WiMAX is turning into a cell phone and/or hand held device standard to be compared to LTE. at one time it was seen as as wider area version of wifi. i think this is very significant from a customer perception point of view as well as where the pricing structure will end.

    i want to replace my high speed cable internet with something that can be used anyplace in the city i live in not have faster internet on my cell phone that does not have the processing power to consume data at the promised speeds anyway.

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