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Summary:

Clearwire showed off huge LTE speed gains using a fatter band of spectrum than those currently deployed by other operators. But is this test a real example of its potential competitive advantage or merely a giant sales pitch to boost the value of its airwaves?

MikeSievert 6

Clearwire has achieved speeds of 90 Mbps down during its LTE trials according to an executive at the company speaking at the 4G World event happening this week in Chicago. Fierce Wireless covered Mike Sievert, the chief commercial officer at Clearwire, who said Clearwire achieved the 90 Mbps down while driving around Phoenix in a “real-world” setting, although on a network that has no actual customers. From the story:

Sievert said in Phoenix, Clearwire is testing a WiMAX network alongside LTE network technology running in both 10×10 MHz and 20×20 MHz network configurations via equipment from Samsung and Huawei. He said Clearwire recorded download speeds of 50 Mbps in the 10×10 configuration, and 90 Mbps downloads (and around 30 Mbps uploads) in the 20×20 configuration. ‘What you have here is something massively different,’ Sievert said. ‘This is a strategy for us to stay ahead.’

Or is it? Has Clearwire, which currently offers a WiMAX network, delivered a pitch for the potential superiority of its future LTE network, or has it created the a test network as a sales tool in order to pump up the value of the spectrum it holds, and will likely need to sell? For a wireless provider, the spectrum is like the land on which the network is built. The airwaves are a finite resource that dictate how much capacity a mobile operator has. Capacity determines the number of users a network can have on a specific area, how fast the network can go and how profitably a carrier can deliver mobile bits. Technologies like LTE and the next generation LTE standard, known as LTE Advanced, will improve the number of bits traveling over each megahertz of spectrum, while technologies such as femotcells can reuse spectrum, but the airwaves are the glass ceiling that operators eventually bump up against as mobile demand skyrockets.

For Clearwire to point out it can achieve a 44 percent increase in speeds using twice the spectrum is significant. I’ve written how its vast spectrum reserves are a huge advantage for Clearwire as mobile data demand rises. (Check out what video on tablets might mean for mobile operators!) Rivals like Verizon are deploying LTE in 10×10 MHz blocks, which limits the capacity and will likely lead to pricing schemes that constrain use by making usage expensive. For Clearwire, the additional spectrum means faster speeds or more competitive pricing (or higher prices and higher margins, I suppose) which may be the strategy for Clearwire that Sievert refers to.

I can’t help but think about Clearwire’s billions in debt coming due next year, as well as its recent board changes and articles saying that it’s testing the waters on its spectrum value. My hunch is Sievert’s talk may be less about Clearwire’s future network strategy and more about portraying its spectrum as a viable competitive threat to other mobile operators who might be interested in buying spectrum, as well as boosting the value of that spectrum.

Related GigaOM Pro Content (sub req’d):

  1. Are there any regulatory issues involved with how much spectrum a given carrier can own? Or are they constrained only by price?

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  2. MobileManIsBack Wednesday, October 20, 2010

    This is pure posturing. Clearwire has no $$ and it looking to sell some of its assets to stay afloat.

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  3. [...] later merged its spectrum with that of Clearwire, which now provides the 4G pipe. So what about these LTE trials being run by Clearwire? “We have so much spectrum that we decided to do tests so in case we have multi-modal phones with [...]

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  4. [...] meet demand, wouldn’t the giant swaths of spectrum (up to 100 MHz in some cities) held by Clearwire look pretty enticing, even if it isn’t paired and is in a higher band that would require more towers)? After all, [...]

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  5. [...] said in November Sprint may also risk default. Meanwhile Clearwire has a lot of spectrum, and has trialed LTE-networks on some of it, but analysts are uncertain if Clearwire has the cash to make a switchover to LTE. [...]

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