Big Clearwire News: Huge Subscriber Adds, LTE Test Plans

August 4, 2010

We’ll break down and unpack the news as we get more info during the afternoon, but the big news from Clearwire today is on two fronts: One, a huge surge in new subscriber adds that had the company adding another million projected subscribers to its yearly predictions; and two, announcement of technical trials of Long Term Evolution (LTE) technology, the same technology that big cellular providers like Verizon and AT&T will use for their forthcoming 4G services.

On the new subscriber side of things, as we predicted Clearwire benefited from a huge surge of network adds from its wholesale partners, most likely Sprint Nextel which had sellout success with its HTC EVO 4G WiMAX smartphone launch in June. For the quarter, Clearwire added 722,000 net new subscribers, with 595,000 of those coming via wholesale channels and another 127,000 added via Clearwire’s own retail sales efforts.

Clearwire now claims 1.7 million subscribers on its network, 752,000 of which are wholesale customers — meaning that by the end of the year, the company may have more wholesale customers than retail. The interesting twist to the wholesale number from Q2 is that more than half (52 percent) of the new 4G customers live in markets where Clearwire’s services aren’t even yet available — meaning that people are either buying 4G products like the EVO simply because they like the device, or they are buying hybrid 3G/4G devices and using them for travel to WiMAX markets. Back in February, Clearwire had seemed a bit optimistic when it predicted it would have 2 million subscribers by the end of the year. Wednesday, Clearwire CEO Bill Morrow said the company now expects to have nearly 3 million network subscribers by year end.

On the LTE side, Clearwire’s tiptoe into the LTE waters became a full-scale immersion Wednesday, when the company said it would conduct multiple technology tests with a partner list that includes Huawei, Samsung and chip maker Beceem. While Clearwire CEO Bill Morrow said the company remains “committed to WiMAX” for its current network buildout plan, expect most followers to take Morrow’s claim that Clearwire could conceivably launch LTE services with “real-world download speeds of between 20 Mbps and 70 Mbps” and match that up against the expected 5 Mbps-12 Mbps speeds forthcoming from Verizon’s LTE services later this year.

We will break down each and every facet of all the news today — buried inside the list of announcements was another wholesale contract with small-business service provider Cbeyond, and Morrow’s contention that Clearwire might look into selling some of its licensed spectrum to help fund the company’s ongoing expansion plans.

While we don’t even have time to dig into Clearwire’s financial numbers — our 30,000-foot view says that revenues and ARPU don’t mean so much right now since the company is so early in its deployments and strategic agreements — it seems clear from the rapidly growing subscriber adds that Clearwire is making the kind of hay it needed to, if it wants to have any chance of competing directly with the larger cellular providers when they ramp up their massive marketing and infrastructure spending machinery.


Clearwire: Clearing the Decks for LTE?

May 5, 2010

They say it, and we believe it: Right now, for the foreseeable future, Clearwire Corp. (Nasdaq: CLWR) is a WiMAX company, selling a WiMAX-based 4G service that by all accounts is doing quite well. But the company’s potential to add Long Term Evolution (LTE) services to its portfolio increased in probability Wednesday, with the revelation of the reversal of a legal deal with Intel that had previously prohibited Clearwire from offering anything except WiMAX until late in 2011.

Since LTE equipment still isn’t even available in commercial volumes, it’s still early days to talk about any Clearwire-to-LTE move. But the noise over such a strategy may raise in volume following Wednesday’s quarterly earnings conference call, when Clearwire CEO Bill Morrow said that the company’s previous deal with major investor Intel — which effectively would have kept Clearwire from launching any services other than WiMAX until about 2012 — had been renegotiated, and has been replaced with a structure that is much more flexible, and will allow Clearwire to move more quickly to LTE should LTE-based services and devices (like say, an LTE iPhone) take off.

While it’s going to ride the WiMAX train as long as it can, Clearwire and its partners aren’t ignoring the obvious market momentum behind the still-developing LTE standard. In fact, Clearwire CEO Bill Morrow has publicly floated the idea of harmonizing the technologies in the future, under a hybrid 4G standard that could provide for economies of scale on all fronts. Given the remote possibility of that happening, the Intel re-negotiation is a sign that Clearwire is also already taking steps to ensure it can move to LTE just as fast as any other provider, maybe even faster than some others.

What makes Clearwire and LTE such an interesting discussion is the probable ease with which the company could add LTE services to its portfolio. (Unlike Stacey H at GigaOM, I don’t think this is necessarily an either-or-game.) Given its huge spectrum position, Clearwire has enough assets to build an LTE network side-by-side with its WiMAX network — unlike AT&T and Verizon, who are already talking about repurposing spectrum from 2G and 3G to make room for 4G.

In terms of network infrastructure, both WiMAX and LTE are IP-based, so it’s a guess that much of Clearwire’s core network equipment could handle both types of traffic. Responding to questions about LTE costs on the call, Clearwire was coy but did note that of a typical site build, the portion associated with radio-specific equipment represents between 10 and 15 percent of costs — so in theory Clearwire could build itself an LTE network for a fraction of the cost of a greenfield provider starting from scratch.

There are of course many details and questions to work through — such as the fact that Clearwire’s spectrum at 2.5 GHz is much different from the 700 MHz spectrum Verizon and AT&T will be using for their planned LTE deployments. But with big LTE backers Samsung, Huawei and Cisco in Clearwire’s corner, it’s safe to assume smart people are already looking into such challenges. Another note from the call today: Clearwire announced “vendor financing deals” with two of its infrastructure partners — perhaps a sweetener now to move to LTE later?


Huawei Joins Clearwire Supplier List

August 11, 2009

In a separate announcement before its earnings call today, WiMAX provider Clearwire announced that China’s Huawei has joined its list of infrastructure vendors, specifically to provide radio access network (aka RAN) equipment. According to the press release:

Specifically, Huawei will provide several key infrastructure pieces, including base stations, element management system (EMS) components, and related network hardware and software.

Clearwire said former suppliers Motorola and Samsung remain on the WiMAX provider’s preferred list, along with Cisco, Ciena and microwave backhaul specialist Dragonwave. Update coming after a call this morning with Clearwire.

UPDATE: According to Clearwire chief technology officer John Saw, Huawei will be providing base station technology that offers “a significant improvement in coverage and quality,” thereby leading to lower costs for Clearwire network deployment. The Chinese supplier’s aggressive pursuit of matters WiMAX includes 2,000 engineers working on WiMAX, according to Charlie Chen, senior VP of marketing for Huawei USA. Clearwire said Huawei gear will first be used in Hawaii and Seattle, two markets where Clearwire has scheduled live rollouts for 2009. Hat tip to Unstrung’s Dan Jones, who has been talking about a Huawei-Clearwire connection since way back in March.