Blog Post

Clearwire Needs Money, So Hopes Cable Needs WiMAX

logo_notag1Clearwire (s clwr) has enough money to provide 4G wireless broadband service to 75 million people this year, and hopes to raise enough to boost that to 120 million by 2010. Clearwire CEO Bill Morrow tells The Seattle Times today that the $2.5 billion the company has allocated for expansion will only go so far, however, and after that it will need more cash. Given that Verizon (s vz) plans to cover 100 million people by the end of 2010 with a competing Long Term Evolution 4G network, a delay in fundraising may leave Clearwire in the dust with regard to some of its ambitious plans to provide wireless access for consumer devices — such as e-readers — that need a nationwide presence.

And amidst the worst fundraising environment in a decade, it’s hard to feel confident that Clearwire can bring in investors to its vision, which has already sucked in several billion over the last few years and (so far) led to more than $1 billion in writeoffs.  But Morrow has a plan, which looks surprisingly like taking advantage of the fact that cable companies and Sprint (s S) don’t have a mobile broadband offering outside of WiMAX. From the The Seattle Times interview:

If you consider just for a moment the opportunity to grow in this marketplace, where almost everybody confirms the real growth is going to be in a broader-band wireless mobile play, we’re in the sweet spot. Sprint is relying on us to do that for them, the cable companies don’t have their own access for this and there’s really no other carrier with the spectrum to be able to launch into this area, other than AT&T and Verizon, and this is a brand-new space.

In short, we own this spectrum and Sprint and the cable guys have their backs to the wall with regard to having a mobile broadband product. So, they’ll have to fund us.

9 Responses to “Clearwire Needs Money, So Hopes Cable Needs WiMAX”

  1. Verizon has not said that it “plans to cover 100 million people by the end of 2010 with a competing Long Term Evolution 4G network” at all. Verizon President and COO Denny Strigl said the carrier would have 100 million people covered by 2010 and that TRIALS of the Long Term Evolution network would begin later this year in Boston and Seattle. It’s plans for LTE rollout have gone backward by a year already and will go backward even more before we see services.

    Can you really see Verizon rolling out an IP-based high-speed wireless broadband network when its main revenue stream is from voice calls? Under net neutrality rules it’s revenues would be demolished by VoIP usage as soon as decent handsets appear and there isn’t anything Verizon could do about it. It may get some compensating broadband revenues but unless it offers something more than simple broadband it’s going to be caught between escalating bandwidth usage, declining voice revenues and flat broadband tariffs.

  2. The one city at the time deal for the new Wimax is just fine. I’ll prefere to wait the end of 2010 for the 120 million people coverage. 3G is simply not worth it.
    Also I won’t hold my breath too much as far as LTE being ready by then with both data and voice on the same device…

  3. Scarhawk

    Clearwire has a data-centric network design and way more spectrum than competitors. If they can raise enough capital to get the network built out, they win. They’ll be able to drive everyone else into the ground, even with a “dumb pipe” business model, because they’ll have much more network capacity and can afford to throw bandwidth at VoIP, IP video on demand, unlimited usage, that are the bottlenecks of incumbent wireless carriers.

  4. the thing is that clearwire needs to cut a deal so that its customers get unlimited off net roaming on sprints 3G CDMA network when WiMAX is not available. if you look at clearwires offering right now it is not so much the technology or speed of the network that is the attractions as much as the price and unlimited usage. sprints CDMA and clearwires WiMAX should be joined into a single data network with the WiMAX buildout happening in the most congested areas first; but most importantly the combined network should be offered nationwide at a single price point/usage restriction no matter which network a given client is connected to.

    if the above is done is see the offering becoming extremely popular; at least if pricing is similar to the current WiMAX only offering.

    • Jesse Kopelman

      The plan is for such service to be available through Sprint, instead of Clearwire. If you have a WiMAX data plan through Sprint, it would prefer the Clearwire network, but fall back to Sprint’s legacy 3G. I’m pretty sure that this offering will be rolled out by Sprint by the end of the year. They are just waiting for Clearwire to have a decent number of cities covered so that they can do a nationwide advertising campaign.

      • Stacey Higginbotham

        Right, but for cheap CE devices, having two radios isn’t as cost-effective and it takes up space and power inside a device which doesn’t provide broadband access as its main function. The 3G/4G model makes sense for a broadband dongle, but maybe not for an e-reader.