Independent Clearwire Blog

My Thoughts On Clearwire / Sprint And The Five Dwarves

I just read an analysis of the Clearwire / Sprint Mobile WiMAX deal that was so flawed that I decided to break radio silence and offer my thoughts.

It's gonna work. McCaw's gonna make it work. McCaw has enough star power that he can rope in other players and with this deal, he has leverage of the controlling the vast majority of US 2.5 GHz spectrum and the certainty that if Mobile WiMAX is going to happen on any appreciable scale in the US, it's going to happen, or not, through McCaw.

Those preferred system vendors that Sprint selected? That doesn't mean squat now. A classic play out of the McCaw wireless playbook is to pit multiple system vendors against each other. That'll certainly happen now - again, McCaw has the leverage now, not Sprint. The wisest will do business with McCaw... but will count their fingers after the handshake.

Why will "New Clearwire" work? One of the biggest reasons is that Mobile WiMAX really is different. It's the first wireless system of the Internet era, built for providing Internet Access, that's actually designed to be deployed on a large scale. The wireless telephony systems have, yes, been "extended" for Broadband, but at the core those systems have all the overhead, expense, and inefficiency of the telephony network. Mobile WiMAX is to wireless telephony (cellular) what Voice Over Internet Protocol (VOIP) is to Plain Old Telephone Service (POTS).

New Clearwire Is Official

It's official - Sprint is subsuming its Mobile WiMAX business unit - Xohm into a new version of Clearwire.

The press releases:

• Sprint Nextel
• Clearwire
• Comcast (PDF) and supporting PowerPoint slides (PDF)
• Intel
• Google (blog post rather than a corporatespeak press release - bless 'em!)
• Time Warner Cable (nothing found on their website)
• Bright House Networks (nothing found on their website)

Some things that jumped out at me from reading the press releases:

• One of the key things that the cable companies got, and may well have been more important to them than helping birth a national Mobile WiMAX network, was to get access to Sprint's 1.9 GHz CDMA  on terms that were finally satisfactory to them.
• Sprint Nextel's and Clearwire's respective involvement reminds me of the old joke about what the chicken and pig respective parts of a ham and egg breakfast - the chicken contributed, but the pig was committed. Similarly, Clearwire is committed - it will be subsumed into this new structure. In comparison, Sprint will "contribute" - its spectrum, etc. will be contributed into a subsidiary of Clearwire... so it won't be completely "melded" into the new Clearwire... just in case. Undoubtedly, this was a sticking point, but Clearwire didn't have a choice other than to go along with Sprint's wishes. Without Sprint's spectrum to build a fully national network, Clearwire didn't have enough potential scale to justify new investments - it's momemtum had stalled.
• Kirland, Washington wins big - they'll be the host city for the headquarters of the new Clearwire. Expect lots of Kansas folks to migrate - they'll be in for some serious sticker shock. Welcome to the Eastside, Barry West! In taking up the coffee habit, I can recommend Tully's.
• The total transaction amounts to about $14.5B, but the new funding amounts to a "mere" $3.2B. Google committed to twice that in the 700 MHz auctions which had far less potential impact than a national Mobile WiMAX network operating in 190 MHz of spectrum at 2.5 GHz. Google, had it chosen to do so, could have easily contributed the $6B or so and eclipsed the cable operators and become much more important... perhaps the primary... influence within the new Clearwire. In my opinion, it should have done so.

This deal has a lot of moving parts, and apparently requires regulatory approval, and won't be finalized until the last quarter of 2008. A lot can happen. But, in all likelihood, it will - Dan Hesse needs to get Mobile WiMAX off his plate and move onto fixing Sprint's CDMA business and jettisoning Nextel and the 800 MHz mess. Clearwire simply can't move forward without this. Their current offering of DSL speed Broadband Internet Access using the proprietary Expedience system, even with a PCMCIA card and the rumored  Express Card providing "kind of mobile" service, and a telephony offering (by all accounts, pretty crappy).

I wish new Clearwire well. But it's telling that within a couple of months, I plan to be an ex-Clearwire customer. Verizon wooed me, successfully, with 15 Mbps symmetric Broadband Internet Access FIOS service at my house for about the same price as I pay for Clearwire service. I'll still do Broadband Wireless Internet Access, for now, with 1xEV-DO Rev. A from Sprint Nextel. New Clearwire can make a huge impact, but by continuing to deploy proprietary systems, they're falling further behind in the fight with fiber, DOCSIS 3.0, 1xEV-DO Rev. A, and HSPA, and the steadily increasing sophistication and availability of Wi-Fi HotSpots.

By Steve Stroh

This article is Copyright © 2008 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

This article was written and posted via Broadband Wireless Internet Access (BWIA); free Wi-Fi at Tully's Coffee in Woodinville, Washington.

WSJ Says Clearwire / Sprint WiMAX Joint Venture Nearly A Done Deal

I received an email alert from the Wall Street Journal that Sprint Nextel and Clearwire will shortly announce their long-gestating "joint venture". (I should probably renew my WSJO subscription in return for this early tip.)

I called this on February 20 - The Inevitability Of Clearwire Plus Sprint Nextel 2.5 GHz. There's just no way it couldn't happen, especially in this challenging financial climate.

WSJ says the "contributors" are Comcast, in for $1.05B, an even $1B from Intel, $550M from Time Warner Cable, and $500M from Google.

Interesting roundup of players, all neatly aligned against, and motivated by the actions of the telephony incumbents. Comcast and Time Warner Cable finally get a wireless telephony option to add to their triple play offerings. For Intel, it's just business as usual trying to foment more of a market for its big bet on building WiMAX and Mobile WiMAX chipsets. Google... more "pure Internet" Broadband Wireless Internet Access is always a good thing, and of course, "buying into the Clearwire club" insures that there will be ample motivation for Android phones.

Maybe now Clearwire will commit to deploying Mobile WiMAX in Seattle.

By Steve Stroh

This article is Copyright © 2008 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

This article was written and posted via Broadband Wireless Internet Access (BWIA); Clearwire service using a NextNet Wireless / Motorola Expedience Residential Service Unit (RSU).

Getting Mobile WiMAX In The US - Clearwire And Sprint Need Help

As I explained in 73, and Thanks For All The Fish, I will no longer be writing very much about BWIA, including here on Independent Clearwire Blog. There's ample "content" and "expertise" about Clearwire available for readers that want to follow developments.

But I've been asked about the developments relating to Clearwire, Sprint / Nextel's Xohm Mobile WiMAX "venture", and their apparent intentions to create a consortium that will eventually lead to a widespread, if not national deployment of Mobile WiMAX systems in the US. This is potentially a seminal development in Broadband Wireless Internet Access, so  as one of my final articles on BWIA and Clearwire as the "purest play" of BWIA, I'll offer my thoughts. CTIA Wireless 2008, the US wireless telephony industry's biggest conference, begins next week, and there are likely to be some developments announced, so I thought I'd get my analysis out ahead of that.

There are two primary issues relating to the formation of a US Mobile WiMAX Consortium consisting of Sprint/Nextel, Clearwire, Google, Comcast, Intel, and others.

What Do We (Think We) Know About Sprint Nextel Plus Clearwire For 2.5 GHz Mobile WiMAX In Early 2008?

The mainstream media is abuzz this past week with rumors and "sources" stating that an arrangement between Sprint Nextel and Clearwire is "close" to fruition.

I've been saying that there will be such an arrangement - that it is inevitable, for months now.

To me, the "if" isn't in question. The only questions are the details about branding, customer ownership, ownership of spectrum and network, and when the arrangement will be consummated.

So, let's try to parse out some of those details from the mainstream media.

MSM datapoint: The "arrangment" will be embodied into a new company that will take control of both Sprint Nextel's and Clearwire's 2.5 GHz spectrum. (Source - Sprint, Clearwire Near WiMAX Deal)
SKS analysis: This is another opening feint. 2.5 GHz / Mobile WiMAX is a distraction for Sprint from what its managment, majority of personnel, and its investors view as its core business - wireless telephony and Broadband Internet Access over Wireless Telephony. Clearwire will come to dominate the new company. Also, neither company is actually going to "give up title" to itss respective spectrum - it's just too scary to contemplate "letting go" of spectrum assets.

The Inevitability Of Clearwire Plus Sprint Nextel 2.5 GHz Spectrum

(Background)

I've been predicting that a arrangement between Sprint Nextel and Clearwire that effectively puts Sprint Nextel's extensive 2.5 GHz spectrum under the control of Clearwire, which can then go forth and deploy a truly national Broadband Wireless Internet Access service using Mobile WiMAX technology... is, simply, inevitable. All that remains is to work out the details of the arrangement that will preserve some profit / equity / branding for Sprint Nextel and some face-saving rhetoric for Sprint Nextel's abysmal failure to capitalize on the incredible opportunity of combining Sprint's and Nextel's (conglomerated from Worldcom and a few other companies) 2.5 GHz spectrum and more-than-good-enough technology (Mobile WiMAX) finally being available.

My most direct prediction of this was made December 27, 2007 - (Prediction) Clearwire Takes Over Sprint Nextel 2.5 GHz Spectrum - I don't see any way in which this isn't inevitable. Clearwire has the vision, but they'll need a lot more money, and although it's a bit nuts, Clearwire apparently still isn't deploying Mobile WiMAX in new markets. Sprint Nextel will struggle just to rationalize its Nextel 800 MHz conversion and its Sprint 1.9 GHz CDMA networks and streamline their overall businesses - it simply can't afford, or significantly fund Mobile WiMAX on 2.5 GHz spectrum - even if the strident shareholders were supportive, which they're not.

Summarized neatly on January 22, 2008 -  Sprint Nextel reductions - you know there has to be a BWIA angle -  ... My prediction stands that Sprint Nextel will essentially spin out Xohm and its 2.5 GHz spectrum into a joint venture with Clearwire, or dump it outright. There's simply too much corporate inertia at Sprint Nextel - invested careers and tribal knowledge, technological infrastructure built for "the core competency of a telephone company is to generate billable events", and the external pressures of "the good old days of the cellular business" for a Mobile WiMAX service, with its radical distillation of "telecommunications" into "Stupid Network", for Xohm to gain any significant traction within Sprint. ...

Sprint Nextel reductions - you know there has to be a BWIA angle

Excerpt from Good Day, BWIA - Tuesday, 2008-01-22 in Broadband Wireless Internet Access (BWIA) / WiMAX News:

 While there was nothing stated about Broadband Wireless Internet Access in its announcement of significant cutbacks, Sprint Nextel's (expensive) commitment to deploy Mobile WiMAX services using its 2.5 GHz spectrum has to be weighing heavily on Sprint Nextel's new CEO Dan Hesse. It's going to be expensive for Xohm to get traction in its launch markets of Washington / Baltimore and Chicago. Not only does Xohm have to explain what it's service is, but why you really need it, especially given the aggressive competition for customers of such services by AT&T Mobility (nice that a name has finally settled out for AT&T's wireless services) and Verizon Wireless, soon-enough T-Mobile's (true) broadband services expected to launch this year... and, worst of all, Sprint's own 1xEV-DO Rev. A services on its CDMA network. And doing so in the midst of downsizing Sprint's workforce and possibly consolidating Virginia employees to Kansas (good luck!), stockholder angst that the reductions don't go far enough, and salvaging a viable business out the badly-damaged iDen service. My prediction stands that Sprint Nextel will essentially spin out Xohm and its 2.5 GHz spectrum into a joint venture with Clearwire, or dump it outright. There's simply too much corporate inertia at Sprint Nextel - invested careers and tribal knowledge, technological infrastructure built for "the core competency of a telephone company is to generate billable events", and the external pressures of "the good old days of the cellular business" for a Mobile WiMAX service, with its radical distillation of "telecommunications" into "Stupid Network", for Xohm to gain any significant traction within Sprint.

By Steve Stroh

This article is Copyright © 2008 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

(Prediction) Clearwire Takes Over Sprint Nextel 2.5 GHz Spectrum

Excerpt from Good Day, BWIA - BWIA Predictions / Trends for 2008 (Part 2) in Broadband Wireless Internet Access (BWIA) / WiMAX News

I don't see any way in which this isn't inevitable. Clearwire has the vision, but they'll need a lot more money, and although it's a bit nuts, Clearwire apparently still isn't deploying Mobile WiMAX in new markets. Sprint Nextel will struggle just to rationalize its Nextel 800 MHz conversion and its Sprint 1.9 GHz CDMA networks and streamline their overall businesses - it simply can't afford, or significantly fund Mobile WiMAX on 2.5 GHz spectrum - even if the strident shareholders were supportive, which they're not.

By Steve Stroh

This article is Copyright © 2007 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

Sprint keeps sending out feelers what to do about its 2.5 GHz spectrum - wither Mobile WiMAX?

Excerpt from Good Day, BWIA - Tuesday on Broadband Wireless Internet Access (BWIA) / WiMAX News:

Sprint Nextel's fumbling of its proposed Mobile WiMAX network and its pandering to its investors that it's "investigating options" for its 2.5 GHz spectrum is, to me, really starting to impact on Sprint Nextel's overall credibility. Sprint Nextel's latest ramblings, reported in the Financial Times, simply smack of desperation. It's abundantly "clear" (no pun initially intended) that Clearwire is the only US company poised to take full advantage of 2.5 GHz in the US to offer Broadband Wireless Internet Access services. AT&T and Verizon Wireless would probably be willing to buy Sprint Nextel's 2.5 GHz spectrum, but that would be a horrific strategic blunder in making those two behemoths an even stronger competitive threat against Sprint Nextel - expedited corporate suicide. T-Mobile has its corporate hands full and isn't in position to exploit 2.5 GHz.

Slow BWIA News Day - Pontification

Excerpt from Good Day, BWIA - Monday on Broadband Wireless Internet Access (BWIA) / WiMAX News:

Very slow news day; apparently the BWIA newsmakers are catching their breath after a busy week last week. So, like Glenn Fleishman, I'll take this opportunity to pontificate a bit. I'll be terse, and perhaps a bit mysterious here - I intend GDBWIA to be "light" and a quick read, and save the long-winded, in-depth pieces for FOCUS. That said, here goes.

The telecommunications industry is entering another inflection point, similar to what happened to it with the rise of the Internet, and the rise of Voice Over Internet Protocol (VOIP) telephony, and "pure" VOIP like Skype. We're just beginning to see the dimensions of the next generation of wireless. We're experience a severe clash between the comfortable, familiar, and safe technology evolution, and the disruptive technology of Mobile WiMAX. Investments and commitments continue to pour into conventional wireless telephony, most recently, Verizon Wireless' stated intent that "Long Term Evolution" LTE is what it plans to use for the direction of its network. But the potential of Mobile WiMAX technology to offer very efficient use of spectrum, optimized for TCP/IP / Internet and able to easily deliver multiple megabits  per second and integrated (and high-quality through bandwidth reservation protocols) VOIP is highly disruptive. If Mobile WiMAX gets a "toehold" in a market against more conventional wireless telephony, it could easily out-compete wireless telephony.