Spinoff Gives Sprint, WiMAX a Second Wind

Aggressive Goals

Clearwire accordingly has an aggressive goal of covering 15 million PoPs by the end of the year, more if it can access additional capital, said Clearwire CEO Ben Wolff. It also will reach 120 million to 140 million people by the end of 2010 — which is when LTE from Verizon Wireless and AT&T Inc. will just start becoming reality, and still be nowhere close to widespread commercial deployment, said Xohm chief Barry West, who will soon become president of Clearwire.

Clearwire, in other words, will have a clear time-to-market advantage, which will help with the ROI profile of the network build. Wolff said it would take $2 to $2.3 billion in revenue to achieve cash flow positive, but when you’re the only 4G game in town, ramping that up doesn’t sound as daunting as it might otherwise. Especially when you consider that WiMAX delivers four times the performance of legacy technologies at one-tenth of the cost.

“This fundamentally changes the economics of delivering applications,” Wolff noted, saying it was too early to name planned price points. “It’s a lower cost of delivering bits, and we’re finding we’re able to get customers to the same ARPU levels as [legacy data plans] because there’s better bandwidth even with a limited footprint. Obviously the economics are favorable. We’re staying focused on value proposition, and we can compress pricing if we need to.”

Further helping out the business plan is a long-term relationship with Sprint wherein Clearwire will lease tower space and other network infrastructure at below-market rates, and will use Sprint’s backhaul, long-haul network, back office and sales channels at “favorable” price points. And, it will become an MVNO for Sprint’s 3G services. Wolff said the two companies already have spent a good chunk of effort to make sure the two networks will work together.

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines