Sprint and Clearwire join to build WiMAX network, kill competition
Sprint and Clearwire announced that they will join together to build a nationwide WiMAX network in the US. Sprint and Clearwire were competitors, until now. The loser: the US consumer.Sprint and Clearwire announced that they will join together to build a nationwide WiMAX network in the US. Sprint and Clearwire bid for WiMAX licenses but until now, were competitors. The deal has to get approved by the Department of Justice (for antitrust issues) and the FCC.
The press release states that Sprint will focus its efforts primarily on geographic areas covering approximately 185 million people, including 75 percent of the people located in the 50 largest markets, while Clearwire will focus on areas covering approximately 115 million people. Initially, the two companies expect to build out network coverage to approximately 100 million people by the end of 2008, with seamless roaming enabled between the deployed areas.
I think it’s a terrible blow to competition in the market for WiMAX services. How could any competition authority possibly bless this deal?
WiMAX is struggling despite huge amounts of money being poured into PR. Last month, the Wall Street Journal reported that Sprint was looking for a new way to finance its WiMAX rollout (which will cost $3 billion). Sprint’s investors, in particular activist investor Ralph Whitworth, whose company owns 1% of Sprint, questioned the WiMAX strategy (see WSJ article, subscription required). Clearwire’s stock has dropped dramatically since its IPO last March 2007 although the stock price rose sharply today upon announcement of the Sprint deal.
As Steve Stroh commented in a recent article,
And are people really begging for WiMAX, at least the WiMAX that these operators are going to deliver to people? (see my commentary on why WiMAX may be like the ChipKnip).
Recently I reported that WiMAX networks risk becoming dumb pipes which explains why these two carriers are now going to collude to rescue it from Dumb Pipe status and in the process, deprive people of choice.
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I don’t know that you could say that the partnership will ‘kill competition’ Sprint does not play in the same space that ClearWire does. Sprint is more likely to target dense urban centers where as ClearWire, to date, has been going after ‘last mile’ deployments, which is exactly where WiMax shines. ClearWire was *never* going to be an actual competitor for someone the size of Sprint to begin with.
Esme,
Your analysis is unfortunately off base and out of touch with the reality that faces the US consumer, municipal or county employee that does not live in northern California, Philly or other areas where citywide WiFi projects are under way.
This announcement means that there is now going to be another nationwide option for mobility besides cellular data as well as a fixed option besides DSL and cable. Those of us who live in rural and suburban markets where there may not be citywide WiFi ever have one more choice.
Other broadband options are on the way, as Sam Churchhill points out in his recent post, including 700 MHz and other licensed and unlicensed frequency options: http://www.dailywireless.org/2007/07/19/wireless-broadband-options-abound/
I also find your comments about licensed proprietary technology to be a bit inaccurate. First, WiMAX is not proprietary -it is based on open standards just like WiFi. Second, it appears that you have forgotten that some of the muniwireless projects that have been highlighted in this blog are using licensed proprietary technology to meet mobile public safety needs: Riverside, CA is using 4.9 technology. Third, more WISPs are turning towards licensed microwave to provide interferencef-free carrier class backbone connections. Licensed technology plays an important role, in the backbone of the network as well as the last mile and should not be considered “evil” or bad for the broadband consumer.
The city managers, police and fire chiefs, public works officials and other municipal representatives that I deal with every day could care less about licensed versus unlicensed, WiFi versus WiMAX,etc. They just want a solution that meets their needs and in the case of public safety they want a network that is carrier class, not just good enough. This solution could be WiFi, WiMAX, fiber, 700 MHz, 900 MHz, BPL, even brass monkeys on light poles. The key thing is that it has to work and allow them to use their applications and be more productive in their jobs.
I would encourage you to reach out to the folks in Grand Rapids, and get their reaction to this announcement. You will definitely find consumers there who are very excited and believe this meets their needs and provides an even more compelling alternative broadband option.
Clearwire makes a lot more sense a year later, given the recent news of setbacks in implementing municipal wifi in other cities.
NoWiresNoKidding is providing a secure and portable alternative to municipal wifi for it’s customers. I think it’s a more practical solution for anyone who needs broadband access and is concerned about sending information over a random and unsecure wifi hotspot. Clearwire is fast, inexpensive, and very secure.
nwnk.clearwire.net for more info. Until 9/30, get set up for just $14.99 with no activation fee. And get $100! No other portable solution is a better value for the money.
Wifi, and WiMAX, two different technologies,
Wifi Was Designed for operate in the local lan arena, with a range per access point of no more than a thousand feet or so
this is great for inbuilding, and hotspot type deployments.
wifi was rigged together in an attempt to provide for wide area networks, there are several problems with this.
limited bandwidth, high levels of interference when in an urban enviroment, and large deployment
wimax, was designed for distance communications, fixed, nomadic, and now moving in to the mobile enviroment, and provides for large bandwidths
if anything i would see large municipalities using both technologies, using wifi to provide local area connectivity, then backhauling on wimax , and unlike wifi mesh deployments which require municiaplities to negotiate locations for equipment, with wimax municipalities already have the locations built standing and ready …..