Sidecut Reports

Pretty interesting to see AT&T CEO Randall Stephenson saying basically that his company really doesn’t want to sell you a 3G-powered iPad, since he thinks you will probably use it over Wi-Fi anyway. Easy for us to say we told you so, but it’s not like that was the most original take. Anyone who has been watching AT&T’s wireless network struggles over the past year can’t be surprised that Ma Bell isn’t going to go out of its way to promote yet another bandwidth-hogging device.

Perhaps even more interesting are Stephenson’s quotes about what he sees in the future for AT&T wireless customers — namely, consumption-based pricing, especially if you are a heavy data user. From the Reuters story today, this quote from Stephenson:

“For the industry, we’ll progressively move towards more of what I call variable pricing so the heavy (use) consumers will pay more than the lower consumers,” Stephenson said.

While most observers also think that Verizon will price its launching-sometime-this-year Long Term Evolution services in a similar fashion, the folks at Clearwire were headed in a different direction Tuesday at their developer’s workshop in Santa Clara, Calif. — namely, talking about all-you-can-eat data plans at much faster download rates than comparable 3G cellular data plans from the big carriers. What really caught our eye was a graph showing what happens to your monthly costs when you start exceeding the 5 Gb monthly data caps that 3G “unlimited” plans all have attached — the 3G costs go up like the proverbial hockey stick, while the Clearwire WiMAX pricing stays the same. (The presentations from the developer confab are supposed to be posted soon; we’ll put a link in here when they are up.)

One of the data points to emerge from Clearwire at the conference was the fact that so far its WiMAX customers are chomping up a lot more data — around 7 Gigs per month each, according to Clearwire, a figure also headed up. As we’ve said before we think Clearwire has a good message to get out when it comes to being the value leader in wireless data services. Expect to hear more about this theme from Clearwire and its WiMAX partners as the year progresses.

At the Clearwire developer confab today in Santa Clara, Calif. … we are inside at the Santa Clara Convention Center using the Clearwire Innovation Network that is live in several areas around Silicon Valley.

The question — does WiMAX work indoors? Here’s our answer:

Any questions?

While we don’t have any insider knowledge as to what the company will say, here are a few topics we will be looking for more information on during the Clearwire (Nasdaq: CLWR) quarterly and year-end conference call this Wednesday, and our guesses as to what the answers might be:

MARKET LAUNCHES: Clearwire said publicly last year that 2010 will see a lot of new market launches, including the important big-city markets of New York, San Francisco, Boston, Houston and Washington D.C. With Verizon starting to ramp up the publicity machine for its Long Term Evolution market launches later this year, it behooves Clearwire to offer more clarity on “when” its 4G WiMAX services will hit the Big Apple, Beantown and the Left Coast. Our guess? Look for NY and SF later in the year, Boston and D.C. in the summer.

THE WIMAX SMARTPHONE: Since its partner Sprint upped the WiMAX smartphone ante by leaking some launch details to Forbes last week, Clearwire will likely be questioned closely on shipping dates for the hybrid 3G/4G smartphone that Clearwire CEO Bill Morrow had previously promised to ship sometime before Christmas 2010. Our guess is that this is something that Sprint wants to have first, so Clearwire’s own version may have to wait.

WHOLESALE MARKETS: While we don’t believe the rumors of Clearwire getting out of the retail business, it does make sense that the provider’s big-name wholesale partners — like Sprint, Comcast and Time Warner Cable — may eventually end up with more total customers than Clearwire corporate. While it’s still early days for the wholesale partners (who only really started reselling services in the middle of 2009), it would be interesting to hear some actual wholesale-customer subscriber numbers (which neither Clearwire nor its partners have provided so far) and perhaps some predictions about how big a percentage the wholesale business will be to Clearwire over time. Our guess is that it’s probably still too soon to hear any detailed numbers or predictions, or any information on a possible spectrum lease to someone like T-Mobile.

Having missed this week’s quarterly earnings call from Sprint, we checked in on the always-reliable Seeking Alpha transcript to see if Dan Hesse and crew had any kind words for their WiMAX efforts, via the network run by Clearwire. Though Sprint didn’t release any 4G subscriber numbers — as we’ve said before we think honesty (even if the count is low) is the best policy — Hesse did drop some foreshadowing that should make 2010 a busy year in terms of WiMAX market and device launches.

Here are a few 4G-related bon mots from Hesse’s remarks during the Q & A to pass on:

– a reiterated promise for a hybrid 3G/4G device that looks and feels like a phone, shipping in 2010

– new markets that cover roughly four times as many potential customers as the markets Clearwire and Sprint enabled during 2009

– continued no-data-limit contracts for the WiMAX part of any service equation

After saying that the WiMAX/3G phone would “make a big difference,” Hesse added:

So internally we call 2010 the year of 4G. It’s going to be the year that we’re the only game in town and it’s a combination of we need to get more markets turned up and we need to get a better device lineup and then we think we can really start to show some sizable progress in that regard.

We should hear more about markets when Clearwire reports its Q4 numbers Feb. 24. Publicly the company has said 2010 will see launches in San Francisco, New York, Boston, Houston and others… check back after the Mobile World Congress LTE love-fest to hear more about where you can find live 4G services, this year. And not LaTEr.

Thanks again to Seeking Alpha for the call transcript.

(Editor’s note: The following is an excerpt from our latest report, Inside Clearwire: A Network Report, which looks specifically at Clearwire’s use of microwave backhaul for its nascent national WiMAX broadband network. The full report can be downloaded FREE by clicking on this link.)

BACKHAUL: THE BACKBONE OF THE NEW NETWORK

Though its funding comes in chunks of billions of dollars, in the world of telecom Clearwire is a scrappy startup — an underfunded underdog that is forced to improvise and invent new rules to play against the telecom titans whose advertising budgets alone dwarf Clearwire’s yearly captial expenses. On Clearwire’s side, however, is an impressive swath of wireless spectrum, and the power of using open, standards-based Internet Protocol (IP) technology at its base to produce economies of scale and to promote competition among its suppliers.

“When you have no money, and you’re a small company, and you are desperate to differentiate yourself, you’d be amazed at what you can come up with,” said Dr. John Saw, Clearwire’s Chief Technical Officer who has been with the company since its inception — his bio notes that he was the company’s second employee hired. “The nice thing about Clearwire is that the first day on the job, I had no legacy network to worry about,” said Saw, a veteran of AT&T’s wireless operations before joining Clearwire. “Craig [McCaw] told me let’s not make the same mistakes that were made before.”

One of the places Saw and Clearwire started innovating right away — and this was starting when the company was launched in 2004 — was to figure out a better way to do “backhaul,” the term associated with bringing bandwidth from the Internet to the radio towers.

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