Clearwire: On the Hot Zone

Posted by Sam Churchill on

Clearwire used Merrill Lynch’s 2012 Media, Communications, and Entertainment Conference to once again remind the market of its leading spectrum position, says Seeking Alpha.

Clearwire is the fifth largest wireless provider in the US with roughly 11 million subscribers. However, only 1.3 million are direct customers. The remainder are Sprint subscribers through a wholesale supply agreement. Earthlink recently announced a wholesale partnership with Clearwire for fixed service, as have half a dozen smaller mobile virtual operators.

Clearwire has always been interesting because, (1) it has more unused spectrum than anyone, (2) it will use TD-LTE Advanced that’s compatible with China Mobile (3) Dish and Clearwire are both promoting large nationwide LTE spectrum blocks, (4) a large spectrum purchase or lease seems inevitable.

AT&T is the prime candidate for buying spectrum from Clearwire. That’s because the iPhone 5 could use up all their spare 700 MHz spectrum. AT&T has virtually no nationwide AWS spectrum, unlike Verizon.

But content companies such as Apple, Amazon, Google and Microsoft could use spectrum, too. Google bid on 700 MHz spectrum at the 2008 FCC auction and developed Android. Google’s mobile OS runs on a whopping 68 percent share of the world’s smartphones. Apple’s Facetime, Google+, and Skype, eat up bandwidth, but don’t require a 3G (voice) fallback. Neither does Voice over LTE.

Selling music, movies, and multi-media magazines will require cheap tablets and cheap data plans. Wi-Fi isn’t cheap – it costs more per square mile than 4G wireless.

Clearwire has been promoting “hot zones” for urban cores for some time. It can focus coverage in areas where it is most needed, such as Chicago, New York, or San Francisco. Tiny microcells, like Lucent’s LightRadio, can be mounted on utility poles.

A 700 MHz macrocell won’t fit on a lightpole.

Then there’s China Mobile, using virtually identical technology as Clearwire. China Mobile expanded its TD-LTE network trial to nine cities and add 20,000 base stations this year. If the trial is a success, the total number of 4G base stations will climb to 200,000 next year. No 3G carrier in the United States has close to that number of basestations.

Everyone wonders when Charlie Ergen will get his FCC waver for terrestrial 2.1 GHz. If it happens tomorrow, it will still take at least 3 years to build the infrastructure. Same deal with AT&T’s 2.3 GHz band.

AT&T can’t wait.

Clearwire will offload LTE using their 2.6 GHz band next year. AT&T, consequently, may buy spectrum from Clearwire. It also makes sense for Apple, Amazon, Google and Microsoft to do a wholesale deal.

Cutting out the carriers will lower prices for consumers. That’s a good thing.

LTE-A, especially the TD flavor in the 2.6 GHz band, has the air of inevitability about it. The 2.6 band is the only true “world band” for 4G LTE.

Too bad the iPhone 5 doesn’t support 2.6 GHz (LTE bands 7 and 38). That cuts out LTE service from Clearwire, China Mobile, and whole countries like Austria, Brazil, Columbia, Denmark, Norway, Russia, Saudi Arabia, and Switzerland. Apple will jump through that hoop when serious 2.6 GHz LTE deployment starts next year.

AT&T will follow.

The innovative small cell work being done by China Mobile, Softbank in Japan, O2 in the UK, and Clearwire in the US, will show how microcell LTE-A deployment is done.

The time is right for municipal fiber.

Cities have the rights of way and the infrastructure. Some kind of agreement providing infrastructure access via muni fiber could work for everyone. Maybe that’s what Google Fiber is all about. The new franchise model could be wireless cable.

For everyone.

Posted by Sam Churchill on Friday, September 14th, 2012 at 8:02 am .

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