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.

Will The Cable Companies Build a Mobile Broadband Network?

Scott Moritz wrote an interesting piece at CNNMoney/Fortune titled Comcast pins hopes on a mobile future. Cable companies Comcast and Time Warner have been negotiating with Sprint, Clearwire, Intel, and Google to launch a joint effort to build a national WiMax network. I've written here in the past about WiMax and the relationships Clearwire, Sprint and Google were building and it makes sense to see the cable companies looking at providing broadband wireless services.

We're seeing some interesting customer movement in the industry - another Fortune piece from May 1 describes Comcast's first quarter earnings, here's a couple of interesting quotes from that piece:

• Comcast lost 57,000 basic video subscribers, but added 494,000 digital cable subscribers.
• The company said 65% of video subscribers now have digital service, up from 55% a year ago, and 43% have so-called advanced services like digital video recorders or high-definition TV, up from 38% last year.
• The company also added 492,000 high-speed Internet users and 639,000 Comcast Digital Voice phone customers.

What's happening? We've got the telcos like Verizon and AT&T chasing new video customers and the cable companies like Comcast and Time Warner chasing new voice customers. Both AT&T and Verizon sell 3G wireless services - it makes sense for the cable companies to add a wireless product and it makes a lot os sense to partner with existing wireless providers like Clearwire and Sprint. JPMorgan analyst Jon Chaplin is quoted in the earlierFortune piece: By creating a joint WiMax venture, "it would cost them a fraction of what it would cost them to build out" their own network or to buy Sprint outright.

Keep watching - the deal could happen as early as this week.

Interoperability - The Next Killer App?

Last month I was invited to attend a Cable & Telecommunications Association for Marketing (CTAM) New England Roundtable Event at a Comcast facility in Enfield, Connecticut. Interactive roundtable sessions were led by New England Multiple System Operator (MSO) Leaders on the next wave of changes for the Cable Telecommunications Industry. These interactive sessions were held on new business markets, new technologies. cross-platform content strategies and new products. One of the sessions I attended was on Pivot, a collaborative wireless product that connects Sprint with Comcast, Time Warner, Cox and Advanced/Newhouse Communications.

Pivot integrates a customers mobile phone, home phone, broadband and digital cable services into one interoperable technology and billing package commonly being referred to now as a "quadruple play". At the Cellular Telecommunications & Internet Association (CTIA) I.T. conference last March, Comcast CEO Brian Roberts discussed "killer apps" for products like Pivot. These apps include interoperability, wireless email and place shifted television. Here's a quote from Roberts at the conference:

"Over time [the killer app is] going to be interoperability. Can I take my email and get it on another device? I've been watching my on-demand shows, I've stopped watching at home, I want to finish the last five minutes. Place won't matter." Roberts continued: "There'll be a relationship with the company that will manage my data, my television, my phone, my address books, and my voice mails. The seamless nature of that is what mobility brings.

Robert's comments are right on the mark in my opinion.

Pivot also allows unlimited calling between your cable home service and mobile phones and you can do things like program your DVR using your cell phone. Here's a 45 second commercial you may have seen if you live in Pivot territory:

I was impressed with the first generation Pivot phones and applications I saw at the CTAM meeting last month. I walked away asking myself - Is it cable? Is it wireless? My answer - it's both - it's interoperable!

You can get more info at mypivot.com

Google Phone

By now you've probably heard rumors about a Google phone. According to Bloomberg:

Google Inc. is in talks with Verizon Communications Inc. and Sprint Nextel Corp. about developing mobile-phone software and services, two people familiar with the discussions said.

Google, owner of the world's most-popular Internet search engine, may build a phone operating system or applications, said the people, who wanted anonymity because the talks are private.

Mike McGuire, an analyst at Stamford, Connecticut-based research firm Gartner Inc. is also quoted in the Bloomberg piece:

An operating system would give Google another way to profit from sales of mobile phones, which outsold personal computers by more than 4-to-1 last year......

According to numerous sources on the web, the Google phone will compete directly with the iPhone and be built on an open-source platform, Building it this way could make it a lot cheaper than the iPhone which currently sells for $399. The Wall Street Journal reported on Tuesday that the phone will include many Google applications including search, Gmail, Maps and YouTube.

The Wall Street Journal also reported that Google is expected to announce advanced software and services within the next two weeks. These services would allow handset makers to bring Google-powered phones to market by the middle of next year.

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AT&T Looking to Close Broadband Divide with WiMax

I've written in the past and Mike Q and I have podcasted about rural areas and how the lack of broadband availability (Cable modem or DSL) can handicap residents including students. WiMax is one of the more promising technologies that can help solve this problem and it looks like AT&T is moving in this direction. The company launched a trial with their Alascom subsidiary in Juneau, Alaska where customers can purchase WiMax service starting at $19.95 a month. Alascom is using Alvarion IEEE 802.16e-based WiMAX equipment to provide speeds up to 1Mbps symmetrical. According to an Alascom press release:

"AT&T Alascom is fully committed to deliver the benefits of broadband Internet service as widely as possible," said Mike Felix, president of AT&T Alascom. "Our deployment of WiMAX-based high speed Internet service in Juneau is the result of years of research into new-generation broadband technologies that are well-suited for deployment in challenging environments such as Alaska. Today, those efforts enable us to deliver a compelling new broadband choice for thousands of Alaskans, including many who have previously not had access to high speed Internet service."

The press release concludes:

"Outside Alaska, AT&T will evaluate opportunities to deploy fixed wireless technologies in other areas of the country based on customer needs and the results of its existing deployments."

DSL Reports Monday quoted anonymous sources saying the company will likely be rolling this out in some areas in the lower 48 - specifically the south:

"AT&T's limited spectrum holdings could make it hard for the operator to take on serious deployment outside of the South"

"Spectrum will also be an issue for AT&T if it wants to deploy outside the South. The 22 2.3 Ghz licenses that it holds come from the BellSouth merger and only cover some of the Southern markets that operator provided service in. AT&T sold off its remaining 2.5 Ghz licenses to Clearwire LLC earlier this year."

I've written about the Sprint/Clearwire WiMax initiative which is directed towards mobile devices (hand held computers, phones, PDAs, etc). This AT&T project appears to be directed as a residential and business broadband alternative - exactly the kind of technology we need to start closing the broadband divide in the U.S.

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Read Show Notes and listen to Mike Q and my latest Podcast titled Micro-blogging linked here.
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Google Joins Sprint and Clearwire in WiMAX Initiative

Today Google and Sprint have announced a partnership - Sprint has agreed to provide Open Standard Application Programming Interfaces (APIs) to Google, allowing Google to develop applications on Sprint web-enabled devices. Services developed for the WiMAX network will include search, e-mail, calendaring, and social networking. The Sprint/Clearwire WiMAX network is scheduled to launch early 2008. Here's a quote from Yahoo Technology News:

.... analysts were quick to point out that the cooperative agreement doesn't exclude the two companies from competing against each other down the road.

"It's an absolute no-brainer" for Google to increase its presence in the wireless sector by working with as many operators as possible and helping them customize services," said Andy Buss, principle analyst with Canalys.com. "But Google is looking to become an operator in its own right."

"It would be good for Google to control its own platform," he said. "They need to make some risk-sharing investments in the underlying networks to have a say in how they're architectured and developed."

In Europe, Buss didn't rule out the possibility of Google becoming a mobile virtual network operator, piggybacking on existing networks. This approach, he said, would allow the company to establish a "consistent" level of expertise across highly fragmented Europe.

In a separate but related topic Google is also in the market for some spectrum of it's own. The Federal Communications Commission (FCC) will be auctioning off the valuable 700MHz range frequency spectrum next year. There is a lot of political positioning happening now and I'll write about it in a future blog so there is not confusion.

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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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