WiMAX World Global Event Series 2008 WiMAX Trends Newsletter

August 26, 2008: Clearwire financials and Google's only hope?

Brian Dolan, Editor
Brian Dolan
Editor

Clearwire continues to dominate the WiMAX newscycle as SEC filings reveal two interesting financial metrics about the new Clearwire: First, current Clearwire shareholders will hold a $1.62 billion stake in the new company. Second, Clearwire said that it will have "adequate liquidity for at least the next 12 months." The company estimates that is has enough cash on hand for "operating losses, capital expenditures, working capital and current spectrum acquisition commitments" during that time period. That aside, Clearwire previously stated that it would need another $2 billion to $2.3 billion to roll out a nationwide mobile WiMAX network through 2010--but many analysts have pushed back on that range.

Meanwhile, a report over at MarketWatch speculates that Sprint's WiMax initiative with Clearwire is what will make or break Google's wireless ambitions with its Android platform. The report repeats longheld speculation that the new Clearwire will launch Android powered phones next year, but it fails to point to the first carrier that plans to launch Android in the U.S.: T-Mobile USA. T-Mobile is on track to launch by Q4 of this year, well before Sprint or Clearwire.

Sure: Google agreed to invest $500 million into the new Clearwire, but does that automatically make Clearwire its only mobile hope? That's far too heavy-handed.

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This paper discusses the improvements that uplink MIMO brings to Mobile WiMAX network deployments and introduces a new technique based on uplink MIMO, tile switched diversity (TSD). Uplink MIMO (UL-MIMO) provides extended coverage (up to 41 percent cell radius increase), and can also be used to reduce power consumption (up to 750 mW power savings) and greatly ease design constraints for high output power CPEs. Maximum performance is obtained when UL-MIMO is implemented both at the mobile station and the base station, but this analysis shows that significant gains can be achieved with UL-MIMO implemented at the mobile station only.

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Intel and the WiMAX community may stick to their party line that WiMAX will complement cellular networks rather than challenge them, but the chief 802.16e flagwaver continually highlights areas where it claims its favorite platform can beat HSPA and even LTE hands-down. These are increasingly not directly about technology - given the similarities to LTE, those arguments are now only for teccies - but about the surrounding processes and business models. First there were the claims that royalties would be low or even non-existent in handsets; then that WiMAX would drive down cost per Mbps to a level undreamed-of by mobile operators. Now the focus is on time to market for devices, with Intel claiming the certification process for WiMAX will enable products to get to users in one-third of the time it takes on a 3G network, enhancing ROI, flexibility in service launches, and user satisfaction.

This may sound ironic, given that the chief complaint of early would-be WiMAX  operators, at least beyond the simple access market, is that usable and affordable devices are largely unavailable or delayed. Even in the laptop, expected to be the early driver of WiMAX services uptake in developed economies, there have been delays in certification of chips and dongles, and even Intel pushing out its deadlines for the WiMAX enabled Centrino. As for handsets and media devices, there are very few on the table, even though much of the success of any advanced mobile service launch relies on a good choice of attractive handsets (as the European 3G experience made bitterly clear in the early part of the decade). Currently there is a debate over which is the more concerning for US WiMAX - potential delays in the clearing of the Sprint Xohm/Clearwire venture, or potential non-appearance of fully certified handsets. The likelihood of both hitting their targets seems remote.

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