February 18, 2009, 8:19 PM — When Verizon Wireless announced this week that it would roll out LTE (Long-Term Evolution) mobile broadband in two cities by year's end, rival Clearwire responded, as usual, by saying it has a better network with WiMax today than Verizon will have with LTE next year.
In terms of what average consumers can actually buy, that may be true: Though networks will be in place in two cities this year, Verizon's LTE won't launch commercially until 2010, according to Verizon Executive Vice President and CEO Dick Lynch. But for Clearwire and partner Sprint Nextel, which began with a head start against LTE measured in years, the clock is ticking. Once projected to reach 100 million subscribers by the end of 2008, the new Clearwire joint venture is commercially available in just two metropolitan areas. The company wouldn't say anything else about its rollout plans on Wednesday.
But the WiMax trailblazer is gearing up to give more details about its strategy on March 5, when it announces its financial results for the fourth quarter of 2008. Those details may include dates for commercial availability of the high-speed mobile data service in Chicago, Washington, D.C., Boston and Dallas-Fort Worth, possibly very soon. Sprint Nextel's WiMax division was already building networks in those cities before the joint venture with the original Clearwire was completed in December. Clearwire is also working on converting its more than 40 pre-WiMax networks to true WiMax over time.
Clearwire may want to hurry with its deployment, because Verizon is moving aggressively to roll out LTE. Most observers don't expect widespread LTE availability until 2011, but Verizon said Wednesday it plans to have networks in 25 to 30 markets in 2010. LTE isn't expected from the other major U.S. carrier, AT&T, until 2010 or later.
WiMax and LTE use similar technology and are designed to deliver multiple megabits per second, on average, to each subscriber. Clearwire has said its service provides between 2Mb per second (Mbps) and 4Mbps to subscribers on its existing network in Baltimore. Verizon said Wednesday its LTE tests show speeds as high as 80Mbps, but it wasn't ready to discuss the average speed, and the 80Mbps might be divided among multiple subscribers in an area.
LTE's biggest advantage is its backing by the Third-Generation Partnership Project (3GPP), the force behind 3G technology among GSM (Global System for Mobile Communications) service providers. GSM is the dominant cellular system in the world, and even Verizon, which currently uses CDMA (Code-Division Multiple Access) instead, is turning to LTE.
But Clearwire claimed some momentum for WiMax, too. Its statement on Wednesday pointed out that the WiMax Forum industry group says WiMax service providers around the world reach 430 million people today. By the end of next year, the group expects 800 million people to be in range of a WiMax service. WiMax is based on IEEE 802.16, a family of open standards.
The Clearwire joint venture came to life last November when the combination of Sprint Nextel and the national pre-WiMax service provider Clearwire was finally completed. The company, which eventually will sell service on both Sprint-built and Clearwire-built networks under the Clear brand, is also backed by partners including Intel, Google and some of the largest U.S. cable operators. Together, those companies injected US$3.2 billion into the venture.
But amid Sprint's business woes, the declining economy and tight credit markets, Clearwire is in a tough environment for building out a national network with a new technology. Intel and other major partners recently took charges against their financial results for a decline in the value of their Clearwire investments. Clearwire said Wednesday it has enough capital to cover its rollout well into the future.
