WiMax

Sprint/ClearWire WiMAX move to shake industry

ClearWire and Sprint have finally married, apparently, brokered by Comcast, Google and Intel. The move is said to be preparing to shake up wireless carriers, but the most significant impact will be to expand the notion of a hot spot into something with metro or even national scope. As we have said continually, WiMAX is portable user technology not mobile technology, and thus will have its greatest impact where 3G is used for laptop connect. We expect to see pricing for wireless laptop plans fall, but all wireless including WiMAX has a significant limit in total bandwidth per cell, and this will result in sub-par performance relative to wireline broadband connections.

Intel’s non-voice mobile devices to jumpstart WiMAX?

In what may well be a key announcement for the industry, Intel revealed that it had 25 partners working with it on portable Internet devices, or “mobile Internet devices” (MIDs) in the new-speak. These boxes will be designed for use while away from home or work but not mobile as the driver of a vehicle, and are larger than a cellphone but smaller than even the smallest laptops. Intel and others believe that the future of wireless non-voice services will lie in these devices, whose screens are large enough to deliver a credible viewing experience. Intel hopes these will jumpstart the WiMAX market, a key market sector for Intel and also one that has seen recent rumors of partnerships involving Intel, Sprint, Clearwire and Comcast.

Sprint and Clearwire Revival?

There is speculation that a Clearwire/Sprint relationship may still be in the cards. The two companies had forged a WiMAX alliance but it came apart in the fall due, we have heard, to a strategy difference between the two. Sprint and Clearwire are now reportedly more in sync with regards to the goals of WiMAX, which we believe means a more premium offering targeted at portable devices and not (as Sprint reportedly wanted) an alternative to fixed wireless at a price sure to be under pressure. It’s too early to say for sure whether the deal will rekindle, but there is a lot of WiMAX buzz at both Sprint and Clearwire that’s starting to sound more like harmony than competition.

Bad Sprint Nextel Earnings Raise Acquisition Questions

Sprint Nextel has turned in another bad quarter with net dropping by 77%. The problem appears to be the loss of high-spend customers who prefer the coverage of rivals AT&T and Verizon. Sprint was perhaps the largest of the wireless carriers to rely on low-quality, bad-credit customers for growth, and the strategy has now backfired as these customers fail to show ARPU growth, or even outright default on payments. Another issue of course is the lack of branded multi-play options; Sprint has no TV and no wireline strategy. We do not think there is any chance that Sprint can stand alone for long; the question is who might acquire them. National footprint is less valuable to cable companies who don’t have that footprint for wireline, but Sprint is the only provider who could cover a major MSO’s territory, and FMC could provide symbiosis for a player like Comcast. The problem with the MSO buyer is the low ROI of Sprint. The other option is T-Mobile, a unit of DT, or one of the major wireless carriers. A T-Mobile deal would likely gain approval; we doubt the FCC or FTC would approve a buy by Verizon or AT&T. Sprint may be driven by its problems to become the most aggressive WiMAX player; only something like a major WiMAX success could save it as an independent. There are also more rumors on Sprint and Google’s “gPhone”, but we don’t think that would be enough to turn Sprint around.

WiMAX revolution could be compromised

USA Today is reporting that the WiMAX revolution is about to happen, which in one extent we believe is correct. WiMAX is definitely going to be a major force in the market in 2009 and beyond, but it is also likely to be at the cusp of a major issue with broadband wireless, which is how to prevent promiscuous Internet access to content from overloading the service and essentially invalidating its truly useful missions. Broadband wireless in any form is a kind of ultimate shared media, and without some constraints on adverse use by a small number of heavy users, its utility could be compromised or its revenue credibility destroyed. The question of how to mediate use on wireless broadband is more important than the question of how to provide it at the technical level.

Cable companies driving WiMAX and WiFI

September 26 2007: The cable companies, in a number of geographies, are deploying both WiMAX and WiFi services with some indication of success, in contrast to the apparent difficulties being experienced by municipal WiFi networks. The success here, we believe, is likely due to the fact that in these applications an incumbent is using wireless to drive extensions to the basic service set rather than by an emerging player to enter the market. However, there are some indicators that even the emerging-player municipal WiFi activity may be stabilizing as the need for a more thorough consideration of a business model is recognized and such refined changes are applied. We believe that wireless and wireline incumbents, partly due to UMA-based or IMS-based FMC, will drive greater use of both WiMAX and WiFi.

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Cedar Point chooses voice over WiMAX

September 21 2007: Cedar Point, a VoIP player in the cable market, has announced it’s deploying a voice-over-WiMAX network in Equador. Voice may be an ideal application for WiMAX and even for municipal WiFi because its bandwidth is low enough to insure that service quality won’t deteriorate under load. For WiMAX, the lower bit rate per customer can mean very large service geographies, up to the theoretical limit of about 30 miles radius. The main issue for VoWiMAX will be spectrum availability in the developed markets. In third-world deployments where there is little spectrum competition and mobility is less significant, WiMAX is a very good choice even for voice alone. For developed economies, 3G mobility is financially attractive and shares the same general spectrum requirements. For both 3G and WiMAX, there are still questions of how the shared-bandwidth nature of the service can accommodate the varying loads of users.

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