Sidecut Reports

With today’s news about Sprint agreeing to provide $1.6 billion in operating funds to 4G network partner Clearwire, it looks like the death of their pioneering high-speed wireless network will continue to be highly exaggerated.

I would normally spend more time arguing this point, but — with a new project on my hands — I will remain brief here. What I would like to see out of those who cover topics telecom, however, is more sticking to the facts on the ground and less glib comments that only serve to cloud the picture.

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With news leaking out today about Verizon Wireless’s apparent decision to double the amount of downloadable data it allows customers on its 4G LTE network, the question of why is one of two choices: Either Verizon’s confident that its network is strong, or it’s panicking a bit because of slow 4G sales.

The answer? Your guess is as good as mine, and we’ll bet Verizon ain’t telling, one way or the other. Our best analysis is that Verizon’s initial high prices for phones and data plans kept a lot of customers from switching to LTE, pushing them instead to the cooler iPhone even though it was on the slower 3G network. So it’s time to juice the 4G marketing effort, and allowing more data is a cheap way to do so.

Last quarter Verizon sold 2 million iPhones and only 1.4 million 4G devices, with only half of those being phones. With so few users on its new LTE network Verizon can afford to give “double down” deals for a quarter or so to juice its 4G sales effort, which still trails Sprint and has even fallen farther behind Sprint each of the last two quarters in head-to-head 4G sales numbers. Let’s see if the double-data deals change that score.

The good news is, for potential new smartphone customers the somewhat stingy Verizon data plans just got twice as interesting. According to the VZBuzz blog that means an $80 monthly plan now gives you 20 GB instead of 10 GB, all the better to watch video on the NFL Mobile app. Verizon’s also giving the premium NFL Mobile app free to new 4G LTE customers so if you want to be a data hog, now is the time to pig out on Verizon’s new plans.

It took them a long time to get there but Clearwire finally has the pricing strategy I thought the company should have gone with out of the gate: A simple, one-price plan for mobile or home service, $50 a month, with no long-term contract necessary. It’s easy to understand and easy to purchase (especially with devices priced as low as $39.99) but — is it too late to matter?

When the nascent national wireless broadband service from Clearwire first became available back in January of 2009, the company had a pamphlet with so many different pricing options (dual plans, mobile + home plans, etc.) that it was hard to write simply just how much the new service would cost. And then Clearwire compounded that marketing problem by changing plans and pricing as it rolled out new markets — all under some claim of “finding out what works.”

What works — what always works — is easy and cheap. I always thought Clearwire should have started out selling a $25 per month plan just to see how many people it could sign up. That might sound business-stupid but how is it any worse than the grand plans of former CEO Bill Morrow, which crashed and burned? Inside Clearwire there were reportedly some renegades who wanted to try out a low-cost no-contract pricing scheme but by the time the Rover puck concept finally got greenlighted it didn’t have a passionate executive backing it so it predictably floundered.

Even as late as a year ago January I still thought a simple two-tier plan from Clearwire made sense, especially to get ahead of the tiered-data plans that were coming from Verizon and AT&T. But nobody listened then and instead we got grand plans for Clearwire smartphones and Clearwire Kindles, which resulted in the great Clearwire-Sprint executive collision, which hasn’t worked out well for either company.

Now you have a Clearwire without any of the leadership that brought the ISP to life — former CEO Ben Wolff, who for many Clearwire originals remained the soul of the firm, resigned from the board last week — and with a withered operational budget that leaves Clearwire no choice really but to strip down its offerings to a simple $50 a month plan, no contract, no download limits. My bet is that a bunch of data-hungry types will snap up these deals and run their laptops and iPads off a Clearwire pocketspot for the next few years, loving the last real unlimited wireless data contract around. It’s just a shame this strategy wasn’t tried sooner, when the company had some marketing muscle to put behind it.