No wonder Sprint Nextel (NYSE:S), Comcast and other investors are irked at Clearwire (NASDAQ:CLWR). Verizon Wireless (NYSE:VZ) is less than two months away from lighting up LTE in 38 markets, including big markets like New York, Los Angeles and San Francisco--and Clearwire has little to show for its big head start that began in 2008.
In the next few weeks, Clearwire and Sprint will face Verizon head-to-head in New York, Los Angeles and San Francisco at virtually the same time. Clearwire launched service today in the Big Apple, Los Angeles will follow Dec. 1 and San Francisco will come online in the middle of December. Verizon hasn't disclosed its launch date, but has promised to turn the lights on sometime by the end of this year--and probably in time for the holiday shopping season.
Clearwire spent a lot of time lighting up smaller markets where it already had assets, but its larger market launches were pushed to the end of the company's deployment schedule because of logistical issues. Clearwire CTO John Saw told FierceWireless earlier this month, for instance, that the company had to deal with 350 separate jurisdictions in New York in order to launch service there. Clearwire has been testing in these markets--major media hubs with lots of potential users--for the past several months.
As a result, tensions among Clearwire's investor have recently increased over the strategic direction of the WiMAX operator, leading to some questions about Clearwire's next round of financing. Clearwire has indicated it is exploring all of its funding options, including selling off spectrum.
But the main question now for Clearwire, Sprint and the cable operators that are bundling WiMAX services with their cable and voice offerings is how will they compete with Verizon Wireless?
Clearwire is still touting its capacity advantage since it holds a greater amount of spectrum than Verizon. Saw told Dow Jones Newswires recently that Clearwire will continue to hold an advantage because a large number of products can run on its networks, including smartphones, laptop cards and WiFi hotspot devices. But that really isn't an advantage at this point in a nascent market where Verizon's LTE network is not fully loaded.
There are no big-bandwidth offerings that go beyond pure high-speed data offerings such as wireless HDTV--offerings Clearwire bragged about in 2008. Clearwire has more than 120 megahertz of spectrum per market in the 2.5 GHz band, and the operator expects New York and other big-city users to continue the consumption trend it is seeing of 7 GB of data per month. So it appears Clearwire will continue to push unlimited data plans.
While Verizon is rumored to be planning usage-based pricing plans for LTE, CEO Lowell McAdam clouded the issue in comments during the recent CTIA Enterprise & Applications show, noting "there is a place for unlimited pricing plans, but over time, customers need to shift to pay-as-you-use. We'll evolve to that, but LTE doesn't necessarily force us to do that."
Will the fact that Sprint has two WiMAX smartphones be an advantage? If so, it may be short-lived as Verizon is promising a half dozen LTE smartphones and tablets in the first half of next year. And we have yet to see any WiMAX-enabled tablets.
At any rate, it should be an interesting fourth quarter in many markets this year as Sprint, Clearwire and Verizon Wireless battle it out in the new high-speed mobile data market. --Lynnette