Big-box retailer Best Buy will resell Clearwire’s 4G WiMAX wireless broadband service under its “Best Buy Connect” brand beginning in 2011, the companies announced today. The deal, versions of which have been rumored almost ever since Clearwire put together its partnership financing deal back in 2008, makes Best Buy the first big-name wholesale partner for Clearwire outside of its core investor group of traditional service providers, a list that includes Sprint Nextel, Comcast and Time-Warner Cable, which all currently resell Clearwire services under their own brands.
“It’s always been a part of Clearwire’s plan to add additional wholesale partners,” said Teresa Elder, president for strategic partnerships and wholesale operations at Clearwire. Best Buy, which recently announced the Best Buy Connect program to resell Sprint’s 3G services, is a potential attractive partner for any broadband service provider simply because of the company’s size and its on-the-ground presence for customers who prefer an in-person purchasing experience.
While pricing and availability details won’t be provided until it gets closer to the planned 2011 availability date, the 4G service will likely mirror the current 3G offering from Best Buy, which includes a mix of plans and options including equipment-discounted deals as well as month-to-month contracts with no early termination fees. Earlier this year, Best Buy, Intel and Clearwire teamed up for a series of WiMAX equipment and service promotions, with discounts for WiMAX-equipped netbooks and laptops purchased alongside long-term contracts for Clearwire service.
Best Buy, Elder said, represents “a different kind of partner” than Clearwire’s existing wholesale resellers, who are all traditional service providers. While the jury is still out on whether or not consumers want to purchase service plans directly from a big-box retailer, having Best Buy promoting WiMAX in all its stores is a win for Clearwire, since any new customer, retail or wholesale, is a boost to Clearwire’s bottom line.
In fact, when Clearwire announces its 2010 second-quarter financial results next week, it is likely that new wholesale subscribers will surpass new Clear-branded retail customers for the first time, mainly because of the sellout success of Sprint’s HTC EVO 4G WiMAX smartphone that went on sale in June. Comcast and Time-Warner Cable have also increased their WiMAX reselling efforts of late, and in the first quarter of 2010 the reseller partners together added 111,000 new subscribers to Clearwire’s network, for a total of 157,000 wholesale subscribers overall.
Still in the future for Clearwire’s wholesale efforts would be a deal with an electronics manufacturer, where Clearwire would provide the back-end connectivity for something like the Amazon Kindle e-Reader, whose connectivity costs are bundled into the content purchase price. Elder said Clearwire continues to talk to multiple potential wholesale partners, since its spectrum position and network capacity give Clearwire the capacity to do so.
“There’s room for lots of partners,” Elder said.