Maybe WiMAX Is Not Dead

I've written here frequently about WiMAX - a couple of weeks ago I even asked if it was dead! However, I have not forgotten about the efforts of Clearwire and Sprint NexTel to build out a national WiMAX network. Yesterday, Clearwire told Unstrung the company is expecting to close the deal, securing a $3.2 billion Sprint Nextel investment ((with $3 billion from Intel, Google, Comcast and Time Warner). The deal has met resistance from AT&T with the company complaining to the FCC about the combined spectrum that would be held by the the two companies.

Clearwire is currently running a "pre-WiMAX" fixed wireless network using proprietary technology from NextNet. The company has plans to go live with its first WiMAX (802.16e) service in Portland, Oregon in the fourth quarter of this year and follow that with Atlanta, Grand Rapids, and Las Vegas. Unstrung quotes a Clearwire spokeswoman:

While we are in a great position to launch mobile WiMAX in our Portland market by the end of the year, the timing of the commercial launch is based on a timely close of the Sprint transaction and whether we choose to secure additional financing in the interim.

I can see a place for WiMAX in rural areas - parts of Maine, New Hampshire and Vermont could certainly benefit. Earlier this year I heard rumors (just rumors!) Fairpoint Communications was considering building their own WiMAX network after the Verizon territory purchase. I certainly scratched my head doubting Fairpoint would consider the cost of building something like that on their own. Now..... a Fairpoint partnership with Clearwire / Sprint Nextel building out rural areas with WiMAX...... that could be very interesting.

My Thoughts on the Verizon Wireless / Alltel Deal

Over the past couple of days I received some email asking for my thoughts on the Verizon Wireless / Alltel deal. At the time the Verizon Wireless purchase of Alltel had not been agreed to by the companies - it was "under discussion". Well.... late yesterday the two companies agreed. Here's some details on the deal from an Alltel press release and Alltel's Wikipedia entry:

- Alltel is the fifth largest wireless carrier in the United States.

- Alltel serves more than 13 million customers in markets in 34 states. This is the largest wireless coverage area in the United States and includes 57 primarily rural markets that Verizon Wireless does not serve.

- Alltel focuses on small to medium size cities but provides wireless services to residential and business customers in all 50 states through low-cost roaming agreements with the major national CDMA carriers including Verizon Wireless and Sprint Nextel. These agreements give Alltel customers access to nationwide service while providing those carriers coverage in rural areas.

- Verizon Wireless currently serves approximately 67.2 million customers. The deal will bump Verizon's customer numbers to over 80 million, placing Verizon ahead of AT&T in the number of wireless customers served.

- The deal is valued at $28.1 billion. Verizon Wireless will acquire Alltel's equity for $5.9 billion and assume Alltel's outstanding $22.2 billion in debt.

When compared to the big companies Alltel, with its 13 million customers, is a small player. Being small has provided some advantages though. Here's an interesting quote from a Washington Post piece titled Is Verizon Wireless Buying Alltel For Its Assets Or For Its Culture Of Innovation?:

[being relatively small] gives the company a level of comfort and flexibility to quickly roll out new services without the constraints larger carriers face. It doesn't worry that millions of users will start using a new service overnight that crash the network, and it doesn't have to train as many customer service and retail representatives every time it launches a new phone or application. So, the concern is that once a part of Verizon this attitude will fade.

My thoughts:

Will Verizon Wireless maintain a level of separation and use Alltel as a wireless "skunk works"? I don't see how it can.

Are Sprint Nextel and T-Mobile next? I would not be surprised to see AT&T take a shot at one of them.

What do these kinds of mergers usually mean for consumers? Less competition and fewer choices commonly lead to higher prices.

The Verizon Wireless / Alltel deal still needs regulatory approval and is expected to be completed by the end of this year.

Sprint and Clearwire Partner on WiMAX Initiative

A few days ago Sprint and Clearwire announced plans to work together in the buildout of a national WIMAX network.

According to a press release on Sprint's website:

"The WiMAX network is being designed to deliver mobile broadband services in urban, suburban and rural markets, and enable significantly greater depth and breadth of services. The arrangement also is expected to enable each company to increase capital efficiency and reduce overall network development and operating costs".

"Sprint Nextel and Clearwire expect to build their respective portions of the nationwide network, and enable roaming between the respective territories. The companies also will work jointly on product and service evolution, shared infrastructure, branding, marketing and distribution. Additionally, the companies intend to exchange selected 2.5 GHz spectrum in order to optimize build-out, development and operation of the network".

I've blogged about WiMAX and Clearwire last September - that blog is linked here. In that blog I described how Clearwire, under Craig O. McCaw's direction, had quietly purchased enough licensed radio spectrum to build a national WiMAX network. Last September I also discussed how Sprint had commtted to the buildout of a national WiMAX network, at that time in competition to Clearwire.

Here's more from July 2007 the Sprint press release:

"Under the network build-out plan, Sprint Nextel will focus its efforts primarily on geographic areas covering approximately 185 million people, including 75 percent of the people located in the 50 largest markets, while Clearwire will focus on areas covering approximately 115 million people. Initially, the two companies expect to build out network coverage to approximately 100 million people by the end of 2008, with seamless roaming enabled between the deployed areas".

"...Sprint Nextel expects to commence the initial stage of its mobile WiMAX network deployments by year-end 2007 and both companies expect to launch commercial service in the first half of 2008. The companies individually are working with a broad range of manufacturers including Intel, Motorola, Samsung, Nokia and others to create an ecosystem of chips, products and software designed to provide mobile WiMAX access".

I think we'll see more of these kinds of partnerships develop as providers combine forces to offer customers higher bandwidths in wider coverage areas. I wish I has bought some stock last September!

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