Seeing Clear Through the New Clearwire

Published on: 3rd December 2008

The mobile broadband industry in the US received a big shot in the arm with Monday's announcement that Clearwire completed their transaction with Sprint Nextel to combine their next generation wireless Internet businesses. However, some of the statements made by Clearwire CEO Ben Wolff may indicate a shift in strategy for the next generation network operator.

It seems as though Clearwire is now open to the possibility of deploying LTE technology in its nationwide mobile broadband network, now branded "Clear." Wolff said in his conference call Monday morning, "we nevertheless should assume that LTE will gain traction" and, "our vendors will be able to deliver network infrastructure equipment to us that will enable us to operate both mobile WiMAX and LTE technologies."

This will clearly have significant implications on both the WiMAX and LTE markets. IMS Research Analyst Bob Perez stated, "Although it sounds like Clearwire may be rethinking its decision to build out a nationwide mobile broadband network using WiMAX technology, the truth is that the operator is still planning to aggressively roll out a mobile WiMAX network over the next few years." He continued by saying that, "Clearwire simply wanted to position itself to best take advantage of the economies of scale that LTE may bring to the market."

Over the next five years, IMS Research is forecasting 7.8 million WiMAX subscribers compared to 2.5 million LTE subscribers in the United States. This is mainly due to Clear's head start with regards to network deployments. However, the number of LTE subscribers is expected to surpass that of WiMAX in the long term.

Perez went on to say, "Should Clearwire choose to deploy LTE alongside mobile WiMAX, the networks will not co-exist as harmoniously as Wolff makes it seem. Although mobile WiMAX and LTE are roughly 80% the same, deploying both technologies would present some significant challenges as no Tier 1 vendors have publicly announced any dual-mode WiMAX/LTE infrastructure solutions."

So what does this mean for Clearwire in the short term? According to IMS Research, the main reason Clearwire would look to deploy LTE would be to take advantage of economies of scale which are not expected to take place until 2012 at the absolute earliest. In the interim, Clearwire will surely stay the course with its mobile WiMAX strategy, delaying any significant shifts in strategy until equipment is available.

 

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