Clearwire wants to simplify its pricing and remake itself as a neutral provider of excess mobile broadband capacity, but its success hinges on Sprint making a new role for itself as the mobile market consolidates. Broadband Reports noticed the new Clearwire pricing, and we confirmed some of the details with a spokesperson. It breaks down like this:
- For new customers, there are no more long-term contracts
- Plans will be unlimited
- Customers will buy, not lease their modems
- Clearwire will no longer offer Sprint 3G as an alternative to WiMAX coverage
- Monthly service starts at $50, but daily and weekly options are also available
This only affects new customers and continues Clearwire’s efforts to back off a retail strategy and go it alone as a source of mobile broadband capacity.
So what does Sprint have to do with this?
Sprint isn’t just a part owner in Clearwire (their relationship has become crazy complicated); it’s also the No. 3 carrier trying to stand fast against Verizon and the threat of a consolidated AT&T and T-Mobile. It’s also trying to pursue a network modernization plan that could see it serving as a source of support for wholesale broadband providers such as LightSquared or disruptive mobile virtual network operators such as the newly outed Republic Wireless.
For example, Sprint has accepted $300 million to let LightSquared, a company trying to build a satellite and terrestrial mobile broadband network, use its towers to set up its base stations. While Sprint would also somewhat compete with LightSquared for wholesale customers, it sees value in bringing in more 4G and mobile broadband providers (or maybe it just needs the cash).
At the same time, Sprint is providing the cellular component for a new type of MVNO from Republic Wireless, that is offering a combo cellular and Wi-Fi VoIP mobile plan using special Android handsets. That network has a far greater chance to disrupt the cell phone market since it’s going after consumers that are already likely on Sprint’s pre-paid or perhaps even post-paid plans.
Sprint’s mobile broadband future includes an ecosystem, not a duopoly
However, as the mobile data revolution continues, Sprint is betting that IP data will change the business models of mobile operators, leaving them the purveyors of a pipe. It’s trying to build out a network that can deliver that pipe to consumers and for those that want to sell to the end consumer. If it succeeds, firms such as Clearwire, which are trying to provide capacity in congested markets, have a business model because they have a chance to sell to Sprint or its wholesale customers.
Plus, if Sprint’s model succeeds, other players may give it a whirl, cobbling together a mobile broadband network using capacity from a variety of players. It may not be the mobile network we’re used to seeing today; Republic is an example of that future as is Macheen, a company that provides a broadband network for retailers.
So as Clearwire streamlines its pricing, and gets out of the retail business, Sprint’s success at proving out that a wholesale market for mobile broadband can thrive, may be the best indicator of Clearwire’s future success.