Clearwire said today it’s changed the terms of an agreement it had with Intel, one of its largest investors, that could lead the way for Clearwire to dump WiMAX and switch to LTE. On its first-quarter financial results call today, an executive with Clearwire said the new terms allow either party to exit the agreement — which had until now forced Clearwire to use WiMAX through Nov. 28, 2011 — with just 30 days notice.
Clearwire did not announce a technology switch, but in response to questions from analysts, CFO Erik E. Prusch said that the overall ecosystem for 4G wireless was converging and as such, the market won’t have the technology wars in the future that it has seen in the past. Clearwire will “keep evolving as we move forward,” he added.
The technologies underlying LTE and WiMAX aren’t so far off as to make a transition from one to the other all that expensive in terms of the network costs, but devices that are currently running on the WiMAX network might need to be replaced if Clearwire implements a wholesale technology change on its radio network. Clearwire has so far been coy about the potential for a radio technology change.
In addition to the potential for Clearwire to move to LTE, its financial results were impressive. In its three most mature WiMAX markets, where it has 47 percent gross margins and 2.7 percent penetration, Clearwire said it’s taking about 18 months to get to profitability. It also said it’s reached 971,000 subscribers (it added 283,000 during the first quarter) and now covers 50 million people.