Is video Clearwire's killer app?

Based on Clearwire co-Chairman Ben Wolff's remarks during last week's CTIA Wireless 2009, it appears Clearwire could be working to tout at least one major advantage the operator's WiMAX network will have over 3G networks: the ability to carry massive amounts of video without causing major network bottlenecks.

It's clear Internet users are enamored with video, whether watching clips on Hulu.com or YouTube or sending video clips back and forth. According to Cisco's latest Visual Networking Index forecast, which makes predictions about the impact of "visual" applications on networks, mobile data traffic volumes are expected to jump 66 fold between 2008 and 2013 thanks mostly to video service consumption. Meanwhile, 3G operators are putting data caps on their data contracts, a big disincentive to using video. Interestingly, the wireless industry has tried to capitalize on video and television through efforts like MediaFLO and DVBH standards, but it appears the bigger demand is Internet-based video running over a broadband connection.

With that backdrop, I now understand why Wolff has continually talked up Clearwire's spectrum position since it merged its assets with Sprint. He again talked it up during his keynote at CTIA last week. That position gives Clearwire the capacity to carry some heavy data traffic. Clearwire's spectrum holdings exceed 100 MHz in most metro markets and in some it holds as much as 120 MHz. Wolff said Clearwire can build a network capable of supporting 540 Mbps of capacity per cell using 120 MHz of spectrum. In 10 MHz of spectrum, throughput falls to 45 Mbps.

While the typical 3G mobile network isn't experiencing a capacity problem today, loading smartphones and laptops runs up the data traffic significantly, Wolff argued. He said a typical mobile phone uses about 30 MB of data a month, but a smartphone is equivalent to 30 cell phones and a laptop or netbook is equivalent to 450 mobile phone users. Those devices can be sustainable but only if less bandwidth-intensive applications run over them. But throw in mobile video services and DVD-quality movies, and consumption jumps dramatically. The only way to meet that demand is with a massive spectrum position, translating into capacity over a 4G network, Wolff said.

It seems, then, that Clearwire could tap into some pretty interesting Internet video provider partners. Companies like Hulu already have found ways to make video consumption a compelling experience on the PC and are beginning to steal subscribers from paid TV services. And Clearwire's cable provider partners, Comcast and Time Warner, are pushing their content out to the Internet too. Time Warner has espoused the belief its customers should be able to see on the Internet the same channels they view on television and is pushing the idea of TV Everywhere.

Video just may be Clearwire's killer app.--Lynnette

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