Broadband Wireless Internet Access (BWIA) News

What Do We (Think We) Know About Sprint Nextel Plus Clearwire For 2.5 GHz Mobile WiMAX In Early 2008?

The mainstream media is abuzz this past week with rumors and "sources" stating that an arrangement between Sprint Nextel and Clearwire is "close" to fruition.

I've been saying that there will be such an arrangement - that it is inevitable, for months now.

To me, the "if" isn't in question. The only questions are the details about branding, customer ownership, ownership of spectrum and network, and when the arrangement will be consummated.

So, let's try to parse out some of those details from the mainstream media.

MSM datapoint: The "arrangment" will be embodied into a new company that will take control of both Sprint Nextel's and Clearwire's 2.5 GHz spectrum. (Source - Sprint, Clearwire Near WiMAX Deal)
SKS analysis: This is another opening feint. 2.5 GHz / Mobile WiMAX is a distraction for Sprint from what its managment, majority of personnel, and its investors view as its core business - wireless telephony and Broadband Internet Access over Wireless Telephony. Clearwire will come to dominate the new company. Also, neither company is actually going to "give up title" to itss respective spectrum - it's just too scary to contemplate "letting go" of spectrum assets.

The Inevitability Of Clearwire Plus Sprint Nextel 2.5 GHz Spectrum

(Background)

I've been predicting that a arrangement between Sprint Nextel and Clearwire that effectively puts Sprint Nextel's extensive 2.5 GHz spectrum under the control of Clearwire, which can then go forth and deploy a truly national Broadband Wireless Internet Access service using Mobile WiMAX technology... is, simply, inevitable. All that remains is to work out the details of the arrangement that will preserve some profit / equity / branding for Sprint Nextel and some face-saving rhetoric for Sprint Nextel's abysmal failure to capitalize on the incredible opportunity of combining Sprint's and Nextel's (conglomerated from Worldcom and a few other companies) 2.5 GHz spectrum and more-than-good-enough technology (Mobile WiMAX) finally being available.

My most direct prediction of this was made December 27, 2007 - (Prediction) Clearwire Takes Over Sprint Nextel 2.5 GHz Spectrum - I don't see any way in which this isn't inevitable. Clearwire has the vision, but they'll need a lot more money, and although it's a bit nuts, Clearwire apparently still isn't deploying Mobile WiMAX in new markets. Sprint Nextel will struggle just to rationalize its Nextel 800 MHz conversion and its Sprint 1.9 GHz CDMA networks and streamline their overall businesses - it simply can't afford, or significantly fund Mobile WiMAX on 2.5 GHz spectrum - even if the strident shareholders were supportive, which they're not.

Summarized neatly on January 22, 2008 -  Sprint Nextel reductions - you know there has to be a BWIA angle -  ... My prediction stands that Sprint Nextel will essentially spin out Xohm and its 2.5 GHz spectrum into a joint venture with Clearwire, or dump it outright. There's simply too much corporate inertia at Sprint Nextel - invested careers and tribal knowledge, technological infrastructure built for "the core competency of a telephone company is to generate billable events", and the external pressures of "the good old days of the cellular business" for a Mobile WiMAX service, with its radical distillation of "telecommunications" into "Stupid Network", for Xohm to gain any significant traction within Sprint. ...

Sprint Nextel reductions - you know there has to be a BWIA angle

Excerpt from Good Day, BWIA - Tuesday, 2008-01-22 in Broadband Wireless Internet Access (BWIA) / WiMAX News:

 While there was nothing stated about Broadband Wireless Internet Access in its announcement of significant cutbacks, Sprint Nextel's (expensive) commitment to deploy Mobile WiMAX services using its 2.5 GHz spectrum has to be weighing heavily on Sprint Nextel's new CEO Dan Hesse. It's going to be expensive for Xohm to get traction in its launch markets of Washington / Baltimore and Chicago. Not only does Xohm have to explain what it's service is, but why you really need it, especially given the aggressive competition for customers of such services by AT&T Mobility (nice that a name has finally settled out for AT&T's wireless services) and Verizon Wireless, soon-enough T-Mobile's (true) broadband services expected to launch this year... and, worst of all, Sprint's own 1xEV-DO Rev. A services on its CDMA network. And doing so in the midst of downsizing Sprint's workforce and possibly consolidating Virginia employees to Kansas (good luck!), stockholder angst that the reductions don't go far enough, and salvaging a viable business out the badly-damaged iDen service. My prediction stands that Sprint Nextel will essentially spin out Xohm and its 2.5 GHz spectrum into a joint venture with Clearwire, or dump it outright. There's simply too much corporate inertia at Sprint Nextel - invested careers and tribal knowledge, technological infrastructure built for "the core competency of a telephone company is to generate billable events", and the external pressures of "the good old days of the cellular business" for a Mobile WiMAX service, with its radical distillation of "telecommunications" into "Stupid Network", for Xohm to gain any significant traction within Sprint.

By Steve Stroh

This article is Copyright © 2008 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

(Prediction) Clearwire Takes Over Sprint Nextel 2.5 GHz Spectrum

Excerpt from Good Day, BWIA - BWIA Predictions / Trends for 2008 (Part 2) in Broadband Wireless Internet Access (BWIA) / WiMAX News

I don't see any way in which this isn't inevitable. Clearwire has the vision, but they'll need a lot more money, and although it's a bit nuts, Clearwire apparently still isn't deploying Mobile WiMAX in new markets. Sprint Nextel will struggle just to rationalize its Nextel 800 MHz conversion and its Sprint 1.9 GHz CDMA networks and streamline their overall businesses - it simply can't afford, or significantly fund Mobile WiMAX on 2.5 GHz spectrum - even if the strident shareholders were supportive, which they're not.

By Steve Stroh

This article is Copyright © 2007 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

Dan Hesse named newest chair-warmer of Sprint Nextel CEO offices

I don't know what to make of the apparent coincidence of the news of Dan Hesse being named CEO of Sprint Nextel, and a story about same being reported pretty deadpan in, of all online new sources, Pravda. Hesse's got his work cut out for him at Sprint Nextel, but at least he's got some background in the wireless business from a stint at AT&T Wireless Services. In the wireless industry, Hesse's better known for being lured from AT&T Wireless Services to become CEO of Terabeam Corp., a Seattle-based company that tried to pioneer 1 Gbps Internet connectivity from rooftops to windows in urban areas using innovative new optical technology. Terabeam is still a bit infamous in the Seattle area having gone through tens of millions in venture capital before ignominiously selling what little remained of its technology and its name to a scrappy, rapaciously ambitious vendor of Wi-Fi technology then called YDI Wireless, who went on to purchase Proxim out of bankruptcy.

Sprint keeps sending out feelers what to do about its 2.5 GHz spectrum - wither Mobile WiMAX?

Excerpt from Good Day, BWIA - Tuesday on Broadband Wireless Internet Access (BWIA) / WiMAX News:

Sprint Nextel's fumbling of its proposed Mobile WiMAX network and its pandering to its investors that it's "investigating options" for its 2.5 GHz spectrum is, to me, really starting to impact on Sprint Nextel's overall credibility. Sprint Nextel's latest ramblings, reported in the Financial Times, simply smack of desperation. It's abundantly "clear" (no pun initially intended) that Clearwire is the only US company poised to take full advantage of 2.5 GHz in the US to offer Broadband Wireless Internet Access services. AT&T and Verizon Wireless would probably be willing to buy Sprint Nextel's 2.5 GHz spectrum, but that would be a horrific strategic blunder in making those two behemoths an even stronger competitive threat against Sprint Nextel - expedited corporate suicide. T-Mobile has its corporate hands full and isn't in position to exploit 2.5 GHz.

Would Google just buy Sprint Nextel?

Excerpt from Good Day, BWIA - Monday on Broadband Wireless Internet Access (BWIA) / WiMAX News:

Rich Tehrani Says Maybe. I say No Way. Sprint Nextel is nothing resembling a strategic fit for Google - it's in all the wrong businesses to complement Google's core competence of Internet-based services accessible via Broadband Internet Access, such as the Public Switched Telephone Network (PSTN), voice-centric technology, dealing with retail customers, etc. But Google could buy Clearwire. Their stock is cheap from the shellacking Clearwire took after last week's announcement that Sprint Nextel wouldn't be proceeding with a strategic partnership for both parties to build out complementary Mobile WiMAX networks on their respective 2.5 GHz spectrum. Clearwire's in the "do whatever you want with your Internet connectivity" business using (soon) designed-for-Internet Mobile WiMAX technology.

By Steve Stroh

Fine Print / Boilerplate / Acknowledgements / Credits / FAQs (Last updated 2007-11-06)

This article is Copyright © 2007 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

Reader Question

Excerpt from Good Day, BWIA - Monday on Broadband Wireless Internet Access (BWIA) / WiMAX News:

Stafford Smith asked Wall Street sees the Sprint Nextel retreat from a joint Wimax network as big setback for Clearwire.  Do you agree? Yes, and No. Yes, that the Sprint Nextel / Clearwire agreement was a big win for Clearwire - they would have given them enormous benefit of their customers having roaming access to much bigger network coverage than what Clearwire could have done on their own - size of team that they can devote to building out network, finances, spectrum acquisition and footprint, etc. Not to mention that Clearwire would have been able to offer their customers nationwide wireless telephony service immediately via Sprint's existing CDMA network. Overall, the agreement would have been a huge win for Clearwire. No, that Clearwire would have been saddled with, and attention diverted by, dealing with a company with enormous legacy issues, including circuit-switched telephony technology, last-generation billing and management systems, huge personnel legacy and "worldview" issues, and thorny migration of Nextel users (those that haven't already quit) from 800 MHz to Sprint's 1.9 GHz CDMA network.

Sprint Nextel has Clearwire right where Clearwire wants them

From Good Day, BWIA - Friday in Broadband Wireless Internet Access (BWIA) / WiMAX News:

Last night the Wall Street Journal reported that Sprint Nextel and Clearwire have called off their proposed agreement to jointly build out a new, nationwide Broadband Wireless Internet Access network based on Mobile WiMAX technology. My take - this is just posturing, or more likely fumbling on the part of Sprint Nextel as they flail around trying to find a new CEO who can spin a good enough story to Sprint Nextel's board and shareholders that Sprint and Nextel's glory days can be restored. 1) Ain't gonna happen, 2) Sprint Nextel is under the gun, as a result of conditions it agreed to as part of the Sprint / Nextel merger, to actually deploy new services in its combined 2.5 GHz spectrum. Or else. 3) Clearwire's got the backing and vision to actually go build a nationwide Mobile WiMAX network; Sprint doesn't have a fraction of that vision and to do so, it's going to have to actively fight its most activist shareholders... riiiggghhhttt. Sprint will spin it, of course, but in the end Clearwire's going to end up with Sprint's 2.5 GHz spectrum. Sliding further out on my limb... my guess for Sprint Nextel's new CEO? Craig McCaw. Oops... he's already spoken for with Clearwire? Well, that problem is easily solved with the simple expedient of Sprint Nextel acquiring Clearwire. You heard it here first.

By Steve Stroh

This article is Copyright © 2007 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).

WSJ Reports Sprint Considering Merger With Clearwire

Excerpt from Good Day, BWIA - Friday in Broadband Wireless Internet Access (BWIA) / WiMAX News:

Interesting story, but something else very interesting was in the article - mentions of the Google Gphone; that sparked several interesting  mental juxtapositions. First... my prediction is that Sprint will in fact bail out on WiMAX and essentially lease, sell, or merge their 2.5 GHz spectrum in a joint venture with Clearwire. Whatever form it takes, Clearwire's Craig McCaw's Machiavellian manipulations extending back close to a decade will come to fruition and he will be, defacto, in charge of the vast majority of 2.5 GHz spectrum in the US. It boils down to Clearwire's stockholders making a pure play bet on the ascendance of "pure" Broadband Wireless Internet Access and Sprint's stockholders fearing "a costly distraction from the carrier's core business". Clearwire stockholders kind of get it, but mostly they're betting on McCaw to "do it again! Sprint's stockholders don't understand that Sprint wireless services are technology-driven, and if you don't have the right technology, versus your competitors, you end up desperately scrambling to catch up; kind of like what the exodus of Sprint customers is indicating right now.