Clearwire Races to Grab 4G Customers

Stacey Higginbotham, GigaOM, 2/24/2010

Clearwire today reported fourth-quarter and 2009 results showing how heavily the carrier is spending to gain customers. As part of its efforts to triple its subscribers this year,  Clearwire reiterated its plans to cover 120 million people by the close of the decade and said it will spend up to $3.2 billion. For Clearwire, 2010 is the year it makes it or breaks it.

After this year, not only will other carriers start heavily promoting their own 4G service, but some $2 billion of Clearwire’s debts will start to come due, up from $586 million in payments it’s obligated to make in 2010. Plus, Wall Street needs fast proof that Clearwire and Sprint didn’t bet on the wrong technology. Everyone is waiting for them to fail.

But despite our skepticism about WiMAX vs. the Long Term Evolution mobile broadband that carriers like Verizon and AT&T are deploying, Clearwire does have two opportunities to survive. The first is if it can sign up a lot of customers quickly on the network, through aggressive promotion and pricing.

When I tested WiMAX in Austin, I was frustrated by the giant holes in coverage, but where there was coverage, it was a much better downloading experience than 3G. Given that Clearwire uses Sprint’s 3G network to blanket those holes, the service isn’t a bad deal. With its cable partners promoting it and most consumers unaware of the differences between WiMAX and LTE, there’s a market for fast, which Clearwire will certainly provide. T-Mobile is hoping to take advantage of this with its HPSA+ rollout as well.

The other advantage Clearwire has is spectrum. For more on the importance of spectrum check out our report, Everybody Hertz: the Looming Spectrum Crisis on GigaOM Pro (sub req’d). The company has up to 120 MHz of spectrum available and is currently deploying its WiMAX service in large, 30 MHz chunks which it can fill with customer’s bits. In contrast, those deploying LTE in the 700 MHz band will use 10 MHz chunks, which can’t offer the same capacity. For now, it means Clearwire doesn’t have a data cap and can offer a better user experience even as more customers join the network.

So can Clearwire deploy quickly, get customers, and then keep them as its competitors roll out LTE? If so, finding success with WiMAX may not be an impossible dream.

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Posted on February 24, 2010 at 4:53 pm by lesliemanzara · Permalink
In: Mobile Technology · Tagged with: , , , , , , , ,

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