Advertisement

 

Clearwire says it remains on track to launch its Clear-branded WiMAX 4G service in Atlanta next month, with Las Vegas slated for a late summer launch and Chicago, Philadelphia and Dallas/Fort Worth scheduled for rollouts later in the year.

"We have been readying Atlanta distribution channels, building up six retail outlets, hiring and training sales teams, and engaging national players, including Best Buy and Radio Shack," and have "many local indirect retailers on board," said Clearwire CEO William Morrow. "And this month we are wrapping up our final operational readiness testing and advanced some store openings, advertising and promotion opportunities."

Heightened Competition 

Clearwire sees Atlanta as a tremendous opportunity to boost its subscriber base. Its current high-water mark is 500,000.

"In June we will be expanding to Atlanta, adding nearly three million people to the Clear coverage footprint and a city that will be our largest market to date," Morrow said. "With the network covering upward of twelve hundred square miles, we will have validated that we can design and deliver large-scale markets with our low-cost network architecture."

But Morrow admits that Clearwire will be facing heightened competition from the incumbent 3G wireless carriers.

"They, too, see the opportunity and firsthand the current strain on their existing networks, but we start with a different heritage," Morrow said. "Incumbents are mobile voice companies adding a narrow pipe for data," whereas "we are a mobile broadband data company and are adding applications, including voice."

Additionally, Morrow noted that Clearwire doesn't need to unseat the incumbent wireless carriers to build a successful business. "As we do not have the same business model, we can achieve good returns even at a relatively low level of market penetration," Morrow said. "We do not have a legacy network or the need to defend past investments."

A Niche Player 

But Gartner Research Director Phil Redman thinks Clearwire will have its hands full competing with today's 3G services, let alone those based on another 4G technology on the horizon called Long Term Evolution (LTE).

"Clearwire's advantage is speed, but not price nor availability; and it is not as fully available as 3G," Redman said. "In the developed markets, and especially in the U.S. market, it is definitely a niche" player.

Still, Morrow said Clearwire is making good progress in testing 4G/3G modems to enable its customers to benefit from the local 4G network but also have access to Sprint's 3G network virtually everywhere else. "We expect to launch the first EVDO/WiMAX modem this summer," Morrow said.

Clearwire's recent launch of a portable accessory that will open its 4G network to hundreds of Wi-Fi-capable products is one other way the company has been attempting to differentiate itself from the pack.

"Think about how many devices are in our homes today which are Wi-Fi enabled," Morrow said. Though the new Clear Spot wireless access point is "not much bigger than a deck of cards," it will "enable all those existing Wi-Fi devices to come to life with a true mobile broadband connection."

Challenges Ahead 

But Clearwire's rivals are already moving to fill the same gap, noted Redman. "The cell guys just launched the same thing through Verizon this week, and Sprint will have it in a week or two," Redman said. "Called MiFi, it connects to five Wi-Fi devices and it goes over 3G."

Clearwire's challenge in the long run will be to raise enough capital to keep adding new markets at a time when money is scarce, Redman observed. "Most of their investors have already written down their investments, so it is going to be hard to raise additional outside money to build up the network."

 

Most Popular on ECNmag,com:

 

Advertisement
Advertisement