Document Actions
Thoughts on the Sprint-Clearwire Collaboration
By Tim Sanders, Senior Analyst - US Market,
Maravedis
CEO - the Final Mile
Contact the author at tim@thefinalmile.net
 |
The recent announcement by Sprint and Clearwire of their joint collaboration to build out their combined spectrum assets with a WiMAX network seems to have not caught on with very much buzz it seems. I am more optimistic than some about this. Certainly, there have been criticisms of Sprint of late, which has taken hits for the loss of customers and other setbacks in its bid to digest the Nextel merger. |
However, in speaking to Sprint just yesterday I got the sense that the company has excitement about what this collaboration can do for them. They pointed out that WiMAX will offer a lot of opportunities for new revenue streams that did not exist before combined with significant cost savings over 3G deployments.
The details are that the two companies will trade
some spectrum, pick out areas to deploy in and begin deployments independently,
while offering customers a cross-roaming functionality AND develop a combined
CDMA/WiMAX service that really manages the downside in case WiMAX doesn't pan
out. The two companies plan to jointly cover 100 million customers by the end of
next year, which is about what Sprint initially planned to deploy alone. So some
detractors may pick at this because of that. For my part, I think there are more
net positives for the industry and consumers that this is a minor issue.
Deploying to anything close 100 million consumers is a gargantuan task. If
involving Clearwire can get that done faster all the better. Ultimately Sprint
intends to deploy to about 185 million consumers and Clearwire will pass about
115 million. Neither goal will be simple to accomplish.
I feel this will quiet restive investors on both sides for the companies and
maybe allay fears of the expense of deploying a network of this scale. The cost
factor seems to have a lot of both pundits and detractors who feel it will cost
more. But I can't help but wonder if some analysts are looking at more
traditional 3G cost models when parsing the information they are getting. In any
event, I think this will answer a lot of Wall Street questions. I also think it
will measurably speed the deployment of both networks especially as we move into
2008.
All well and good, but what does it mean for the industry? I see several
positives. Getting deployments started will be a watershed (certainly Clearwire
already is heavily engaged in this). But having Sprint actually begin
deployments will be a bellwether moment. It ups the visibility for everybody.
Also, I suspect that more institutional money, and investment money in general,
will be drawn into the BWA marketplace as a whole. This type of rising tide
could lift all boats. And make no mistake there is still tremendous opportunity
for smaller carriers to make a mark in this space. To learn more about this and
who some of those carriers are, stay tuned for my WiMAX report in September
where we will reveal what we have found.
Ultimately, I view this collaboration as a positive step for the industry as a
whole.
For more information you can contact the author:
tim@thefinalmile.net
_____
tags:
