Clearwire confirms first mobile WiMAX markets

Clearwire will launch mobile WiMAX in four US markets by year-end, the company confirmed in a conference call last week to announce fourth quarter results.

Clearwire CEO Ben Wolff stated that in 2008 Clearwire would launch all its planned new markets using standards-based 802.16e mobile WiMAX infrastructure. Those markets will be Portland (Oregon), Atlanta, Las Vegas and Grand Rapids, Michigan and each of them will feature "VoIP services from day one". All of those markets are in the US top 50 and Atlanta is a top top-10 market.

Following up its mobile WiMAX trials in the city, the company expects to soft-launch services in Portland by the middle of the year and then light up the other three markets by year-end, said Wolff. "We will thoroughly stress -test the platform in Portland and once satisfied we will launch in other markets before launching more widely," he said.

However, Wolff confirmed that Clearwire is scaling back its capex plans for the year. When Clearwire and Sprint Nextel were jointly planning to cover 100 million pops with WiMAX by the end of 2008, Clearwire's coverage obligations under the deal were 30 million new pops.

Now, after the original deal with Sprint fell through, Clearwire has an "expectation" of rolling out WiMAX in markets that will cover just six million people in 2008, according to Wolff. He added that as of the beginning of 2008 Clearwire had "more than 36 million POPs in various stages of design, development and construction" but that the eventual construction and launch of these networks depended on the "availability of required capital".

"If we are not able to attract the required capital we can further modulate network development to match our financial resources," Wolff said. CFO John Butler added that depending on the financial circumstances the 36 million POPs planned could be moved into 2008 or held until 2009.

Of course, that capital might yet become more readily available if a revamped deal with Sprint Nextel can be arranged. Wolff did not comment directly on the recent speculation surrounding a new Clearwire-Sprint deal although he did state: "progress is being made between our companies on several fronts and I hope to have something more definitive to share soon."

In 2007, Clearwire spent some $369m on capex, adding over 1000 cell sites in existing and new markets, almost doubling the size of its network to cover 16.3 million people. It gathered 188,000 new subscribers, almost doubling its subscriber base to 394,000 and increasing revenues from $67.6m to $151.4m.

Wolff said that the subscriber base of nearly 400,000 households provided a foundation of almost one million people who could form "the basis for an evolution from house-based to meaningful mobile services."

In 2008, however, the company expects to reduce capex to $275-290m, said Butler, who broke down the expected expenditure further.

"In new markets in 2008 and a little of 2009 that should run to $150m or so, then for capacity and coverage of older markets perhaps $30m, and then CPE/residential gateways should cost about $25m, and international markets about 10-15 per cent of total capex," he said.

Butler said that he expected a typical mobile WiMAX cellsite to cost $120,000 and that would cover 2600-2800 households or 6000-7000 people.

Reporting on the ongoing WiMAX trials in Portland, Wolff said that the two operational sites in the city were "exceeding expectations [and] able to demonstrate a seamless user experience across multiple-sized devices." In 2008, Clearwire expects to introduce WiMAX-enabled express cards and mobile WiMAX PC cards, modems, USB devices and embedded chipsets in PCs.

Wolff said that the Portland network was consistently achieving network speeds of 5-6Mbps in the downlink and 2-3Mbps in the uplink. "We have been streaming music, moving at 60mph with 27 seamless handoffs in 20km," he reported.

[get this widget]