In a move that signals Sprint Nextel's (NYSE:S) de-emphasis on Clearwire's (NASDAQ:CLWR) WiMAX network, the operator has notified customers that it will no longer offer mobile broadband plans with unlimited access to the WiMAX network starting in November.
The changes impact Sprint's customers who use tablets, netbooks, notebooks, USB cards, connection cards or mobile hotspot devices. Smartphones are excluded.
Currently, Sprint offers three different rate plans for mobile broadband devices: 3 GB of EV-DO data with unlimited WiMAX for $45 per month; 5 GB of EV-DO data and unlimited WiMAX for $60 per month; and 10 GB of EV-DO data and unlimited WiMAX for $90 per month. Under the new plans, EV-DO and WiMAX data will fall under the same data cap, with a 5 cent per MB overage charge. Mobile hotspot add-on service for smartphones will be limited to 5 GB of combined EV-DO/WiMAX data.
The unlimited offering was used in the past as a way to spur WiMAX adoption and take advantage of the capacity advantage Clearwire's vast spectrum holdings have. It holds an average of 160 MHz in its markets. When Sprint put the WiMAX-enabled Evo View 4G tablet on sale this summer, it came with data services at a higher usage tier than what the company has been offering for 3G tablet data plans.
The change in WiMAX pricing comes after Sprint snubbed Clearwire in favor of launching its own LTE network by mid-2012 rather than continuing to rely on Clearwire's network and spectrum. Sprint owns 54 percent of Clearwire. Sprint has said it will wind down its WiMAX offerings next year.
As such, Clearwire's move could be a combination of de-emphasizing the advantages of WiMAX that it has worked hard to market and reducing payments to its wholesale partner.
In April Sprint and Clearwire announced a revised deal in which Sprint will pay Clearwire $1 billion this year and in 2012 for wholesale pricing related to Sprint's devices that operate on Clearwire's network. The agreement includes a minimum payment per device as well as usage-based pricing and data traffic volume discounts.
As Sprint ratchets down its reliance on WiMAX, will its enterprise offerings get the ax too? In June, the operator announced an enterprise-designed wide area network based on WiMAX that offers connectivity to the Sprint Global MPLS network.
For some time, Sprint has been offering WiMAX as a back-up solution for enterprises when their primary WANs go down. But it has been working to bolster the Quality of Service backed by service-level agreements on the WiMAX network to offer the service as a primary line. Sprint touts average download speeds of 3Mbps to 6Mbps in the 71 markets where WiMAX is available.
Sprint has seen a big opportunity to replace fixed lines at large and medium-sized businesses at a cheaper price. Sprint is backing is WiMAX WAN service with a 99.95 percent availability SLA and offering fast deployment compared with wired solutions.
Clearwire recently announced that it added 1.9 million wholesale WiMAX subscribers, and it's safe to assume that majority of those are Sprint customers.
- see this FierceWireless article
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