The squabbles, break ups and make ups between Sprint and Clearwire have become worthy of a prime time soap opera. Sprint has been reselling Clearwire’s mobile WiMAX network (CLEAR) and offering its own branded “4G” smart phones along with a Samsung tablet that works on CLEAR and Sprint’s 3G network. But earlier this month, Sprint announced it wouldn’t be supporting new WiMAX smartphones at the end of 2012. And Clearwire can’t generate enough cash or attract funding to build out the rest of its WiMAX footprint. Instead, the company has opted for a TDD-LTE buildout. Clearwire provided China Mobile considerable assistance with its TDD-LTE network at last year’s Shanghai World Expo.
Was Sprint shooting itself in the foot? After all, it owns 49.7% of Clearwire! What happens to all the orphaned WiMAX customers next year?
Evidently the two companies are still joined at the hip. Sprint will use Clearwire’s TDD-LTE service to add capacity to its own LTE network, slated to launch early next year, said Sprint’s Bob Azzi during his keynote address at 4G World on October 26th. “We’re taking advantage of the depth of Clearwire’s spectrum for hotspots and offload,” Azzi said, saying it will serve as an “offload layer in the hottest of hotspots.” Sprint’s LTE network will have a “much broader footprint” than Clearwire’s WiMAX network, Azzi said.
Apparently, Sprint and Clearwire are working with vendors on chips and devices compatible with their respective FDD-LTE and TD-LTE networks. Smartphones will have to be compatible with both technologies to take advantage of the capacity boost from Clearwire’s network. They’ll also have to work on Sprint’s 3G network so that customers can get Internet access in places where LTE coverage is not available.
On October 7th when Sprint announced its “Network Vision,” the company said that it would phase out its use of Clearwire’s WiMAX service next year in favor of its own LTE built network in 2012. Sprint’s LTE network is expected to cover 250 million people by the end of 2013 and cost upwards of $4B to build out. That decision was a blow to Clearwire, which depends on Sprint for the bulk of its wholesale revenue. Furthermore, it seems mobile WiMAX will NOT be included in the new multi-mode LTE devices, which also must support 3G (EVDO/CDMA) and WiFi. Hence, the mobile WiMAX eco-system will be shrinking next year and likely more so in the future.
Sprint’s decision to abandon WiMAX in favor of LTE was also noted in an October 26th 4G World talk by Tom Jasny, vice president of wireless and broadband network systems at Samsung. Jasny said that the aggressive deployment of LTE in the United States by MetroPCS, Verizon Wireless, AT&T and Sprint has made it the hottest smartphone market in the world. “Smartphone adoption has grown quickly in North America at rates exceeding the rest of the world,” he said, citing the 42 percent of all cell phone users in America that own a smartphone. Of course, along with smartphone comes data traffic. Though LTE provides a clear advantage over 3G in terms of speeds and spectral efficiency, vendors like Samsung are already starting to talk about the need to increase capacity on the next-generation mobile broadband networks. Jasny said Samsung is stepping up to the challenge with new architectures that use a combination of macrocells and small cells. Samsung is also providing network equipment for Sprint and C Spire Wireless’ respective LTE deployments and partnered with MetroPCS to bring the first LTE smartphone to the U.S. market, the Galaxy Indulge.
Sprint’s Mr. Azzi did not discuss timing or funding for Clearwire’s TDD-LTE network. Clearwire needs $600 million to deploy the service, which will serve as an overlay to parts of its WiMAX network. Sprint also needs to raise money before it can deploy its own LTE network and has not said whether it will help pay for Clearwire’s buildout. There are rampant rumors that Sprint Nextel Corp. and Clearwire Corp. are near an agreement to extend their existing network- sharing agreement for three to five years. The current pact expires at the end of 2012. Clearwire has said it needs about $1 billion to finance its operations and transition its mobile WiMAX network to LTE, which must include migrating its existing WiMAX customers onto that “4G” wireless network.
“Assuming that Sprint and Clearwire sign a new agreement, it providesClearwire with an ongoing source of revenue,” Michael Nelson, an analyst at Mizuho Securities USA Inc., said in an interview with Bloomberg. “This would likely help them get funding, because it would provide increased visibility into revenue- getting opportunitiesand reduce the risk profile.”
Yet with all these back and forth machinations, it is puzzling that Sprint isn’t more supportive of Clearwire who will have great difficulty wholesaling its future LTE network to other “4G” providers. The saga continues. Stay tuned for more updates!
Related Aricle:
No Surprise: Clearwire to shift from WiMAX to LTE – But Who WIll Fund It? #
http://community.comsoc.org/blogs/ajwdct/no-surprise-clearwire-shift-wimax-lte-who-will-fund-it
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