Best Buy to Resell Clearwire’s 4G WiMAX Service

July 29, 2010

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.

Puzzled by Clearwire’s Wholesale Strategy? Order our Report!

July 20, 2010

When observers look at nascent national WiMAX provider Clearwire Corp. (NASDAQ: CLWR) they see a potential competitor to big cellular providers like Verizon and AT&T in the wireless-data marketplace. But then they hear about Clearwire reselling its services through partners like Sprint, Comcast and Time-Warner Cable, and confusion sets in.

You can hear the questions sometimes during conference calls or at trade-show press conferences: Does Clearwire compete with Sprint? How can it hope to sell services against Comcast? To help you gain more understanding, our just-released CLEARWIRE BUSINESS REPORT for July, 2010 explains the details behind Clearwire’s wholesale operations, and why it may not be a bad thing if wholesale subscribers outnumber Clear-branded retail customers for the just-completed second fiscal quarter.

An excerpt from the report (which you can download immediately for just $9.95 USD):

While some observers want to see these multiple brands selling the same service as potential competitors, for Clearwire it doesn’t matter who sells the subscription because every active user on the network means more money for Clearwire’s bottom line. Though Clearwire gains more up-front money by signing up customers to its own-branded service, it must also spend marketing and operational money to get those customers. Wholesale subscriber adds, on the other hand, don’t cost Clearwire anything to obtain, so even at a discounted revenue rate (which has not been reported by Clearwire) Clearwire is still making a good margin because it doesn’t have to pay the hundreds of dollars per new user in traditional customer-acquisition costs.

There’s plenty more simple goodness like that in the approximately 3,000-word report, including details on the latest Clearwire devices (like the new WiMAX smartphones) and some intelligent discussion about the competitive threat from Verizon’s pending LTE launches later this year. Get up to speed on all things Clearwire by ordering your copy today!

Clearwire Has Big Q1, Says 2 WiMAX Phones On the Way

May 5, 2010

We TOLD you there was going to be a lot of news from Clearwire today, and the company didn’t disappoint: In addition to having easily its biggest quarter ever in terms of new subscriber signups — 283,000 new additions during Q1 — Clearwire also announced some additional markets for 2010 launches and said it would have two WiMAX/3G/Wi-Fi phones before the end of the year, one from Samsung and one from HTC.

We’ll post again following the soon-to-start conference call, but since the release is out here are the most relevant stats:

Total Clearwire subscribers : 971,000
Total new subscribers added in Q1: 283,000
Total wholesale (Comcast, Sprint, Time-Warner Cable) subscribers added in Q1: 111,000
Total retail (Clear brand) subscribers added in Q1: 172,000

The wholesale part of the Clearwire equation remains the most interesting to me — be interesting to see when the wholesale numbers pass the retail numbers. An interesting nugget from the press release — some 1/3 of the new wholesale subscribers don’t even live in markets where the WiMAX service is live, but bought hybrid (3G/4G) devices perhaps in anticipation of WiMAX in their home town or to use in WiMAX markets on the road. Clearly the hybrid value proposition is already kicking in.

Total wholesale subscribers: 157,000

More after the call!

Here’s the list of new markets, lifted from the press release:

In recent weeks, the Company has expanded its 4G mobile broadband network service area with five new markets covering nearly five million people, including Houston, TX in March, and earlier this week in Harrisburg, Reading, Lancaster and York, PA.

Clearwire also today announced plans to launch 4G mobile broadband service in 19 additional cities this summer, including previously announced markets Kansas City, KS; St. Louis, MO; Salt Lake City, UT, and the core area of Washington, D.C. and newly announced markets Nashville, TN; Daytona, Orlando and Tampa, FL; Rochester and Syracuse, NY; Merced, Modesto, Stockton, and Visalia, CA; Wilmington, DE; Grand Rapids, MI; Eugene, OR; and Yakima and Tri-Cities, WA.

In addition, the Company reiterated its plans to launch Clearwire’s 4G network in other major markets across the country by the end of 2010, including New York City, Los Angeles, Boston, Denver, Minneapolis, the San Francisco Bay Area, Miami, Cincinnati, Cleveland and Pittsburgh.