Sprint: We’re the “3rd Pipe”  

Sprint Nextel and Clearwire filed a petition with the FCC this week saying it would provide high-speed Internet access that rivaled wired-line broadband when it merged. It also said:

  • The new merged company, Clearwire Corp. would reach 140 million people within 30 months.
  • Clearwire Corp. would provide high-speed access capable of 2-way video conferencing to police, firefighters and schools.
  • Their service would be an alternative broadband platform, or ‘third pipe.”
  • The service would be open and customers would have a choice and plans and they wouldn’t have to buy equipment from the merged company.
  • They could only provide the whole nation with combined forces.
  • They said companies like Verizon and AT&T are “likely loathe to deploy wireless broadband in a manner that would cannibalize their landline business.”

iPCS, a Sprint Nextel affiliate operating in Schaumburg, Illinois, has filed a lawsuit to block the joint venture. The wireless provider, with 640,600 subscribers in seven states, alleges the new Clearwire service would compete with in its markets and therefore violates an exclusivity agreement signed with Sprint in 1999.

Data’s impact on Verizon Wireless’ bottom line could approach US$10 billion this year, said Doreen Tobin, CFO of Verizon Communications at a Lehman Brothers Wireless Conference last month. “Today data revenues represent 23 percent of our service revenues (and) wireless data revenues grew 65 percent in 2007,” Tobin said.

Verizon spent $9.36 Billion on 700 mhz C Block “open access” spectrum covering most of the lower 48 and reportedly spent over $45 billion on EV-DO over the last eight years. Everything must go with LTE. “We increased our spectrum inventory by about 60 percent. Across the top 100 markets we will have a total average spectrum depth of about 85 MHz,” said Tobin.

Sprint has 90MHz of 2.5GHz spectrum, covering 80 markets which it picked up for a song. Clearwire’s CEO Ben Wolff says it will reach 120 million to 140 million people by the end of 2010, before LTE even gets started.

With the new Sprint/Clearwire/Cable venture, Clearwire will have 120Mhz to play with in major markets, compared to the 12Mhz available on 700 Mhz owned by AT&T and Verizon.

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