Clearwire has had a frustrating year so far. For every step it takes forward it seems to be forced a step a back, but CEO Erik Prusch said he is still plenty confident that Clearwire can overcome those setbacks to get its LTE network built and become the country’s only wholesale-focused mobile broadband provider.
At an interview at Mobile World Congress, Prusch said Clearwire had met all of its near-term goals: It had secured funding from Sprint and the banks to keep the company operating and start its $600-million rollout of its particular flavor of 4G, time-division LTE (TD-LTE), and it had even begun to build on its WiMAX business, signing up several new wholesale 4G customers, including Leap Wireless, NetZero and FreedomPop.
At MWC, Prusch was in a particularly good mood as the world’s largest operator China Mobile had just committed to deploying a huge TD-LTE network over similar frequency bands. That, along with similar TD-LTE commitments from India’s Bharti and Japan’s Softbank, will go a long way toward building the global TD-LTE ecosystem necessary to supply Clearwire with smartphones and devices. At the show, Qualcomm announced it would begin making dual-mode LTE chipsets supporting the frequency division (FD-LTE) networks used by AT&T, Verizon Wireless and most of the world’s operators on the same integrated silicon with TD-LTE. (For a wrap-up of MWC’s themes check out my GigaOM Pro analysis: How to Live in Connected World (subscription required).
“By 2014 we’ll have TD-LTE networks in a harmonized band covering 2 billion people around the world,” Prusch said. “We’re skating to where the puck’s going.”
That may be so, but Clearwire is getting banged up against the boards quite a bit while chasing that puck. While Clearwire has signed up innovative new carrier customers like FreedomPop, it has lost several of its original partners. Comcast and Time Warner, both key investors, have abandoned their plans to resell Clearwire’s 4G in order to dance with former arch-nemesis Verizon.
Clearwire’s other big investors are bailing as well. Google recently sold its $500 million investment, taking a $433.5 million bath. Intel also plans to sell a big chunk of its shares. While it’s unlikely that Google or Intel would have launched their own 4G services using Clearwire’s network, their loss of faith in the carrier doesn’t bode well. Majority investor Sprint is sticking by the company, but even Sprint is keeping it at arm’s length, constantly reminding anyone who will listen it has an LTE strategy independent of Clearwire.
To top it all off, the big new ecosystem Prusch has been touting may not be happening as soon as Clearwire would like. The Chinese government is making noises to the effect it won’t issue 4G licenses for another two to three years. That would be a big setback for China Mobile’s rollout of TD-LTE, and would force Clearwire to procure LTE devices without the help of its largest partner. The ecosystem certainly isn’t evaporating – Softbank and Bharti are big operators – but it has deflated a bit.
Roller coaster image courtesy of tonydude919.