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Analysts Doubt Future of Comcast's WiMAX Offering

Wed, 07/01/2009 - 9:18am
Mark Long
(newsfactor.com) - Comcast launched a high-speed wireless data service in Portland on Tuesday as the first step in what the cable-TV network operator expects to eventually become a nationwide rollout -- with Atlanta, Chicago and Philadelphia expected to go online later this year.

Called Comcast High-Speed 2go, the new 4G service will operate over Clearwire's WiMAX infrastructure in the Portland metropolitan area and elsewhere over Sprint Nextel's nationwide 3G network. Comcast is a major investor in Clearwire, together with Bright House Networks, Google, Intel, Sprint and Time Warner Cable.

Comcast's high-speed wireless data service is being bundled with one or more of the network operator's Internet, phone and television products because "in today's world, consumers don't want to be disconnected for even a minute," said Comcast Senior Vice President Cathy Avgiris. "Now Comcast provides wired and wireless access -- a combination consumers won't want to live without."

An Uphill Battle 

Though the move is a step in the right direction for WiMAX, the state of the fledgling high-speed wireless service "is pretty dire" -- not only in the U.S. but also anywhere else in the world, observed Gartner Vice President Ian Keene. A competing 4G standard called long-term evolution (LTE) is already on the horizon and the global recession has been holding back investment in WiMAX, Keene explained.

"Generally, where WiMAX is going to be successful is in developing countries where wireless broadband will essentially be a DSL replacement," Keene said. "But it's an uphill battle for WiMAX anywhere else with a developed infrastructure. The outcome will depend on just what is being offered and comes down to pricing and product marketing."

Comcast is delivering two separate High-Speed 2go offerings. The operator's 4G-only data card provides customers with the fastest available service within Clearwire's 4G service footprint, while the network operator's dual-band data card automatically switches users between metro 4G coverage and Sprint's coast-to-coast 3G network.

Comcast is providing current and future customers with the option of subscribing to a bundled Fast Pack for $49.99 per month that combines both its wireless and cable-based home Internet offerings. Moreover, the network operator's existing customers can receive the 4G wireless service as an add-on for as low as $30 per month, the company said.

Tough to Beat 

Gartner Research Director Phil Redman isn't convinced that Comcast's new offerings will gain much in the way of wireless market traction, at least initially. "Right now there isn't enough coverage or capability to compete with 3G services," Redman said. "If you look at the main four areas -- speed, cost, coverage and devices -- Clearwire and Comcast lose out on all."

"Clearwire is only offering speeds up to 1.5 and 2.0 Mbps, which is fairly similar to what the offer is from the 3G operators," Redman observed. "The 3G operators have nationwide coverage of over 250 million POPs, in over 100 markets," whereas "Clearwire is official in two markets."

Both Comcast and Clearwire offer basic service for $30 per month, which is a bit better than average 3G deals, Redman noted. "However, users can tether a 3G device for PC access for an additional $15, so no real advantage there," Redman said. "Finally, there are many more dongles, PC Cards, embedded PCs, and smartphones that are 3G."

"In the end, cellular operators already have the wired and wireless market share and will be tough to beat," Redman said. "I don't see how competitors without a vastly differentiated offering in one or more of the four areas I mentioned -- cost, coverage, speed, devices -- will survive."

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