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Category: WiMax
November 16th, 2009
Who needs WiMax, LTE? Ruckus Wireless sees opportunities in WiFi
When it comes to wireless broadband, all of the excitement is centered around next generation technologies such as WiMax and LTE. But there are still some who see opportunities in WiFi - well, a smarter WiFi that allows service providers to offer a broadband service that has lower costs of entry and the ability to scale more efficiently.
For the most part, the model - which is being announced today by Silicon Valley’s Ruckus Wireless - has its eyes on emerging markets and rural American markets, places where traditional carriers likely won’t be targeting anytime soon with advanced 4G technologies.
The thing to remember about wireless broadband is that there has to be wired backhaul system in place somewhere. In some markets, that could be a train station or an airport or government center. But getting that connection to neighborhoods or surrounding areas can be an expensive and slow process. But Ruckus has a system that it says will reduce costs for the provider, who can deliver broadband connections for a fraction of the price in a fraction of the time. The company explains it like this:
November 11th, 2009
Clearwire: 'Google believes in us'
Clearwire has a larger war chest, but still lacks a significant subscriber base for its WiMax, or 4G, wireless services. However, the company maintains that it is in the right place at the right time to become a powerhouse.
Those were some of the takeaways as Clearwire CEO William Morrow put on a confident front on the company’s third quarter earnings call on Tuesday. Morrow addressed why Google sat out the latest $1.56 billion funding round and how the wholesale business—Time Warner Cable and Comcast reselling WiMax service—will be huge.
The big question here is whether you buy Morrow’s confidence. Clearwire is forging ahead into new markets in the fourth quarter and continues to have an aggressive build-out plan for 2010. Clearwire is entering the following markets by the end of the year: Atlanta, GA; Baltimore, MD; Boise, ID; Chicago, IL; Las Vegas, NV; Philadelphia, PA; Charlotte, Raleigh, and Greensboro, NC; Honolulu and Maui, HI; Seattle and Bellingham, WA; Portland and Salem, OR; and Dallas/Ft. Worth, San Antonio, Austin, Abilene, Amarillo, Corpus Christi, Killeen/Temple, Lubbock, Midland/Odessa, Waco and Wichita Falls, TX.
Among some of the key items:
November 10th, 2009
Clearwire raises $1.5 billion to continue WiMax buildout
Updated: Clearwire made it official: The company is raising $1.56 billion from its key investors so it can continue its WiMax buildout.
Reports of the funding surfaced Monday. In a statement, Clearwire said that Sprint Nextel, Comcast, Time Warner Cable, Intel, Eagle River Holdings and Bright House Networks will fork over additional capital in exchange for new Clearwire shares priced at $7.33 each.
Sprint Nextel ponied up the most cash. Here’s the breakdown:
- Sprint invested $1.176 billion.
- Comcast $196 million.
- Time Warner Cable $103 million.
- Intel $50 million.
- Eagle River for $20 million.
- And Bright House for $19 million.
The big name that’s missing is Google. In a statement, Clearwire CEO Bill Morrow said that the funding will allow it to continue an aggressive WiMax rollout. Clearwire will get $1.057 billion in cash within five business days and the rest of the funding lands after two closing periods at the end of 2009 and the first quarter in 2010.
Meanwhile, Clearwire is raising $1.45 billion in debt that will pay off a $1.4 billion credit facility. The debt swap will allow Clearwire to raise another $240 million and give it a fixed interest rate.
Clearwire reports third quarter earnings later today and Wall Street is expecting a loss of 43 cents a share. The financing gives Clearwire more runway to roll out its WiMax services and generate more cash. Clearwire was betting on a big fourth quarter.
Update: Clearwire’s earnings have landed (statement). The company reported a third quarter loss of $82.4 million, or 43 cents a share, on revenue of $68.8 million, up 13 percent from a year ago.
The company said that churn is likely to increase in pre-WiMax markets. Clearwire expects to spend $750 million in the fourth quarter, or $1.9 billion for 2009 on its build-out. That’s at the high end of Clearwire’s projected range and explains why the company needed to raise cash.
By the numbers for the quarter:
- Clearwire added 44,000 net subscribers to have a total of 555,000.
- Churn was 3.1 percent.
- And the average revenue per unit was $39.71.
November 9th, 2009
Money pit? Clearwire to get cash infusion
Sprint Nextel and other Clearwire investors are reportedly going to pump another $1.5 billion into the WiMax provider.
According to the Wall Street Journal (Techmeme):
Sprint would invest $1 billion and its Clearwire joint venture partners, a group which includes Comcast Corp., Intel Corp, Time Warner Cable Inc. and Bright House Networks LLC, would kick in another $500 million, said these people. Google Inc., which has been a key joint venture partner, isn’t involved in the latest financing round, these people added.
The announcement is supposed to come this week.
The latest round of funding is necessary if Clearwire’s partners want to keep WiMax alive. WiMax has big backers, but the horse that’s going to carry the technology across the finish line—Clearwire—isn’t exactly a thoroughbred. Meanwhile, Verizon and other big carriers are betting on LTE, a rival technology to WiMax.
At least Clearwire can continue its rollout into major metropolitan areas. Clearwire was betting on a big fourth quarter, but that was a date with disaster from the start.
September 1st, 2009
Clearwire continues build-out, unleashes WiMAX in 8 new Texas cities
Clearwire took another step forward in its U.S. WiMAX build-out on Tuesday by officially turning on the lights for WiMAX in 10 new markets. Eight of the new WiMAX markets are in West Texas:
- Abilene
- Amarillo
- Corpus Christi
- Killeen/Temple
- Lubbock
- Midland/Odessa
- Waco
- Wichita Falls
The other two markets are Bellingham, Washington and Boise, Idaho. That brings the total number of U.S. markets with Clear WiMAX service to 14. Clearwire already has WiMAX deployed in Baltimore, Maryland, Portland, Oregon, Atlanta, Georgia, and Las Vegas, Nevada.
Clearwire’s WiMAX service gives customers the ability to combine broadband Internet in their homes with mobile broadband throughout their metro area. Without WiMAX, customers would normally have to pay for both fixed cable/DSL service plus $60/month for 3G broadband from one of the cellular providers. WiMAX offers speeds of about 3-5 Mbps, so it’s slower than cable but a little faster than DSL and much faster than 3G service.
Clearwire’s Chief Commercial Officer Mike Sievert said, “Clear combines two of the most exciting technological advances of our generation ─ mobile communications and the Internet ─ in order to free our customers to take their rich home or office broadband experience with them anywhere around town or on the go.”
When Clearwire reported its 2Q earnings to Wall Street on August 11, it also reported that it is on track to launch WiMAX in at least 10 more markets by the end of 2009:
- Chicago
- Philadelphia
- Charlotte, NC
- Raleigh, NC
- Greensboro, NC
- Honolulu, HI
- Maui, HI
- Seattle
- Dallas/Ft. Worth
- San Antonio
In 2010, Clearwire plans to launch WiMAX in New York, San Francisco, Boston, Washington, D.C. and Houston.
Clearwire is in a race against the clock. It’s needs to get markets established and start generating revenue in order to fund the rest of its build-out. It also needs to get its new broadband technology and business model established before Verizon starts its LTE deployments in earnest in 2010. Clearwire is building a nice lead in mobile broadband at the moment but if it stumbles at all, it risks getting run over by Verizon.
One factor that could assist Clearwire is its partnerships with cable providers Comcast and Time-Warner, which are expected to offer their customers cable/WiMAX bundles once the stars align in overlapping markets.
August 18th, 2009
EU ups its bet on LTE wireless networks
The European Union said Tuesday that it will invest a fresh €18 million ($25 million) in next generation mobile broadband network research.
These networks, dubbed 4G or Long Term Evolution (LTE), rival WiMax. LTE technology promises mobile Internet speeds 100 times faster than current 3G networks.
In a statement, the EU said it it has been investing in LTE research since 2004. Europe is hanging its shingle on advanced wireless technologies.
So what’s the payoff?
Viviane Reding, the EU’s Commissioner for Telecoms and Media, argues that the LTE research will keep “know-how” in the region. Reding said:
“With LTE technologies, Europe’s research ‘know-how’ will continue to set the tone for the development of mobile services and devices around the globe, just as we did in the past decades with the GSM standard.”
The EU reckons it will invest more than €700 million ($987 million) into research on future networks, half of which will be allocated to wireless technologies.
The EU approach is notable given the conundrum of a national broadband strategy in the U.S. In the U.S., the big elephant in the room is funding. Who will fund U.S. broadband movement and more importantly what’s the business model to support it?
August 11th, 2009
Clearwire bets on fourth quarter WiMax tipping point
Clearwire said Tuesday that it expects fourth quarter net subscriber additions to ramp as it rolls out its 4G Wimax service into more markets. That tipping point will be critical to the company’s success—and possibly its survival.
On a conference call with analysts, Clearwire CEO Bill Morrow said that he was pleased with WiMax uptake in new markets such as Las Vegas. Morrow added that “fourth quarter net subscriber additions will be higher than all 2009 quarters combined.”
That’s good since Clearwire projected a cash burn of $1.5 billion to $1.9 billion for 2009. So far the company has burned through $646 million (statement). Clearwire had $2.5 billion in cash as of June 30. If the fourth quarter 4G customers don’t roll in Clearwire may be cutting it close with its cash burn. Morrow and CFO David Sach cited Clearwire’s strong balance sheet, but Moody’s has it on its “bottom rung” list of companies with weak liquidity.
June 30th, 2009
Comcast to bundle WiMAX in home + mobile Internet package
Comcast will partner with Clearwire to offer a new Internet package that will bundle Clearwire’s WiMAX mobile broadband with Comcast’s cable Internet, according to a report from CNET’s Maggie Reardon.
This isn’t a surprise. Last year, Comcast was part of the consortium of companies that invested in the big Sprint-Clearwire WiMAX deal, so lots of commentators (including this one) have assumed that part of Comcast’s deal would be to help bring WiMAX to market in bundled Internet deals.
Clearwire has launched WiMAX in four markets: Portland (OR), Las Vegas, Atlanta, and Baltimore (which originally launched under the Sprint Xohm brand). Comcast will launch its WiMAX bundle in Portland first and then in the other three cities by the end of the year.
Reardon explains how Comcast will be selling the bundles:
Comcast will be selling 4G [WiMAX] wireless access as part of an Internet bundle to Comcast subscribers. To entice new subscribers, Comcast is offering the new 4G wireless with its 12 Mbps download cable modem service, plus a free 802.11g router for $50 a month for the first 12 months. The data card used for the 4G wireless, which fits into a laptop, costs $99. But subscribers who sign up for the package with a two-year commitment get the data card for free. After the first 12 months, subscribers will then pay $43 per month for the 12 Mbps broadband service and $30 extra per month for 4G wireless service. The 4G wireless service is only available in Comcast’s cable territory, but subscribers who travel to other cities where Clearwire’s network is operational will be able to access the network at no additional cost.
New customers signing up for Comcast’s triple play bundle of TV, phone, and Internet can add the 4G wireless component for $30 extra a month. So with the introductory price of $99 a month for the first year, the total would be $130 a month. After the first year, that bundle increases to $130 per month, so it would cost subscribers with the 4G wireless service $160 a month.
For subscribers who want more ubiquitous coverage, Comcast is offering a 3G/4G service that provides wireless connectivity on the Clearwire 4G network when it is available and on Sprint Nextel’s 3G wireless service in other areas where 4G is not available. The cost of this service is an additional $20 per month. Existing Comcast customers can add the new service for $30 more a month to their existing packages. And they can add the nationwide access with 3G access for $20 more per month.
The 3G/WiMAX bundle is a nice deal since it costs $50/month and the standard 3G mobile broadband plans from AT&T, Verizon, and Sprint typically cost $60/month. The WiMAX 4G service is advertised at speeds of 4 Mbps upload and 500 Kpbs downloads — which is about double the usual 3G speeds. When I tested the WiMAX network in Baltimore at its launch last fall, I got speeds of about 5 Mbps down and 2 Mbps up, but that was before lots users were on the network.
For now, the WiMAX bundle will be most useful to those who do a lot of traveling around their local area, such as real estate agents and local sales people. Next year, it will become a lot more interesting to nationwide travelers.
Clearwire’s WiMAX build-out will include six more cities in 2009: Chicago, Charlotte, Dallas/Ft. Worth, Honolulu, Philadelphia, and Seattle. But, 2010 will be the year that mobile WiMAX truly spreads across the U.S. with Clearwire promising to light up WiMAX in more than 50 additional cities, including New York, Boston, Washington, D.C., Houston and the San Francisco Bay Area. In fact, the Clearwire WiMAX deployments are already underway in most of those big metros.
See also: Beyond mobile broadband, WiMAX is about blowing up the wireless business model
May 14th, 2009
4G wireless makes progress with WiMax, LTE developments
Suddenly, there’s a light at the end of the 4G tunnel. We keep hearing about the next generation of wireless communications but thanks to two developments this week, it’s finally starting to feel like we’re getting close.
First, Clearwire and Cisco announced that Cisco would be the main supplier of infrastructure equipment that will power Clearwire’s new WiMax network across the U.S. Cisco also will introduce a consumer mobile WiMax device later this year.
Then, Verizon Wireless hosted a Webcast for developers to go over the technical specifications of LTE, or Long Term Evolution, the 4G technology that Verizon - as well as AT&T - will use.
The Webcast itself was uneventful for non-developers. I eavesdropped for a bit as the discussions centered around acronym-filled descriptions of antennas and radio frequencies and so on. Still, it was encouraging to hear folks getting into the deep details about the technologies that will boost the mobile broadband speeds in the U.S.
May 13th, 2009
Cisco, Clearwire announce WiMax partnership
Clearwire and Cisco today announced a deal that would make Cisco the main supplier of infrastructure equipment that will power the new WiMax technology, called Clear 4G, across the United States.
In addition, Cisco will work to introduce the first mobile WiMax device later this year.
The companies didn’t provide financial terms of the partnership or details about new products. But Cisco told CNET that the devices will be sold under the Linksys brand and are expected to be introduced later this year.
March 18th, 2009
In-Stat: 30 percent of global wireless will be 3G, 4G by 2013
Advanced wireless networks—3G and 4G—will represent 30 percent of global wireless subscriptions, up from 11 percent at the end of 2008, according to research firm In-Stat.
Despite all of the chatter about advanced wireless services In-Stat’s research is an eye-opener. In the tech crowd one would assume that 3G services had a wider footprint across the globe.
In-Stat’s report raises a few interesting points. Among them:
- WiMax is likely to be attractive in developing markets and remote areas without fixed broadband service. Where 3G networks already exist—like the U.S. and Europe—WiMax is more of a wild card.
- WiMax to date hasn’t been deployed widely for data applications with Clearwire, Korea Telecom and UQ of Japan being exceptions.
- The fourth quarter featured 132 deployments covering the mostly high speed packet access (HSPA), which accounted for 95 of those rollouts. Going forward, In-Stat said it expected most live deployments to be WiMax and HSPA.
Also see: Sprint: Hedging Wimax–or Clearwire–bet?
March 10th, 2009
Sprint: Hedging Wimax--or Clearwire--bet?
Sprint is reportedly testing Long Term Evolution equipment in what may be a hedge in case Wimax doesn’t quite work out.
GigaOm’s Stacey Higginbotham reports that Sprint is testing LTE gear even though it has a big stake in Clearwire. The official Sprint response was that the company is committed to Wimax, but assessing the competitive landscape.
Higginbotham notes that Sprint has some tough choices without its own 4G network. Even Clearwire says LTE may be an option later.
Also see: Verizon Wireless: 4G LTE trials showing 50 to 60 Mbps download rates
The big question here is whether Sprint is hedging its Wimax bet or its Clearwire bet. Given Clearwire’s plan to expand aggressively and burn through a lot of cash in 2009 it would only make sense for Sprint to at least ponder the “what if” scenarios. In addition, Clearwire is on Moody’s Bottom Rung default risk report for March.
Perhaps Clearwire, which has a new CEO, becomes the next wireless juggernaut. A case can also be made that Clearwire could flame out. No matter how you slice it Sprint’s exploration of LTE is just prudent business management.
March 9th, 2009
Clearwire names new CEO to oversee Wimax expansion
Clearwire on Monday named William Morrow, a Vodafone and AirTouch veteran, as CEO replacing current chief Benjamin Wolff, who will become co-chairman.
In a statement, Clearwire founder Craig McCaw said Morrow will bring “a great perspective on achieving operating efficiencies and enhancing value creation to profitably build and scale businesses.”
Clearwire could use Morrow’s scale expertise since the company has to build out its Wimax network and reach multiple markets by the end of the year. Clearwire has said it will burn through at least half of its $3 billion in cash to expand its Wimax network into new markets.
Wolff will remain with the company as co-chairman with McCaw. Wolff will focus on strategy and “transactional opportunities.”
Morrow was recently CEO of Pacific Gas & Electric and was CEO of Vodafone Europe, Vodafone UK and Vodafone KK in Japan. He also served as president of Japan Telecom and was a senior executive at AirTouch International. It’s safe to say that Morrow has wireless chops.
Morrow said:
“The chance to lead Clearwire at a time when the company sits on the cusp of doing something truly remarkable – to change the way people connect to and use the Internet – was not one to be missed. Clearwire’s business model and unique assets have us well positioned to meet the rapidly growing demand for mobile broadband services.”
March 5th, 2009
Clearwire: The race between Wimax expansion and cash burn is on
Clearwire on Thursday outlined its Wimax rollout plans for 2010 as it announced a $118 million fourth quarter net loss. The company also outlined its capital spending plan for 2009, which calls for it burning through at least half of its recently raised $3 billion in capital.
Clearwire’s big Wimax plans were detailed in an earnings release that took more than 1,000 words just to get to the profit and loss statement.
And there’s a good reason for that stall tactic. The company lost $118 million in the fourth quarter, or 28 cents a share, on revenue of $20.5 million. For the year, Clearwire lost $432.6 million.
On a pro forma basis, which assumes Clearwire was merged with Sprint’s Wimax business for all of 2008, Clearwire reckons it lost $157 million in adjusted EBITDA on revenue of $59.7 million. For the year, Clearwire had an adjusted EBITDA loss of $613.8 million on revenue of $230.6 million. Those figures aren’t entirely useful either because let’s face it: They are kinda made up. Clearwire lost millions even excluding the bad stuff like depreciation, taxes and amortization.
Also see: Clearwire, WiMax face uphill battle vs. tight credit
Clearwire-Sprint make it official, pave way for WiMax rollout
Sanity check: WiMAX is about a lot more than just faster mobile broadband
Financial mumbo jumbo aside, Clearwire figures it has 475,000 subscribers today. The big question is how quickly Clearwire can increase that subscriber base to be profitable someday.
For now, Clearwire’s game plan looks like this:
- Expand mobile Wimax network to cover up to 120 million Americans in 80 markets in 2010.
- Bring Wimax to Atlanta, Las Vegas, Chicago, Charlotte, Dallas/Ft. Worth, Honolulu, Philadelphia, and Seattle in 2009.
- Launch Boston, New York, Washington, D.C., Houston and San Francisco area in 2010.
- In addition to the recent dual-mode 3G/4G wireless modem to be launched with Sprint, Clearwire plans to launch a personal hotspot that combines Wimax service (Clear service in Clearwire parlance) with Wi-Fi enabled products.
- Meanwhile, Clearwire is leveraging its Intel partnership to have nearly 100 mobile Wimax devices on the market by the end of 2009.
Fortunately for Clearwire, it has $3 billion in new capital to expand. The problem: Clearwire said it will spend $1.5 billion to $1.9 billion in 2009 on its buildout. The company is hoping to “manage current cash resources into 2011, although this time period can be extended as it is driven largely by the pace of expansion.”
Stating the obvious, Clearwire said: “The ultimate timing of Clearwire’s network build-out will largely be driven by the company’s market by market success and the availability of additional capital.”
The Wimax vs. cash burn race is underway.
February 18th, 2009
Verizon Wireless: 4G LTE trials showing 50 to 60 Mbps download rates
Verizon Wireless said Wednesday that it is testing 4G Long Term Evolution (LTE) service with the aim of launching commercial service in 2010. Verizon Wireless said the 4G LTE network in field trials has demonstrated download rates of 50 to 60 megabits per second, but the final speeds are to be determined.
Verizon Wireless’ 4G LTE deployment uses the company’s recently acquired 700 MHz spectrum. 4G LTE is a rival technology to WiMax, which is backed by Sprint, Clearwire and tech industry heavyweights such as Intel. The 700 MHz spectrum had been used for television signals, but was acquired by Verizon, AT&T and others in an FCC auction.
Speaking at the Mobile World Congress in Barcelona, Verizon CTO Dick Lynch outlined some of the details behind its next generation network. Among the key points:
- Verizon has named Ericsson and Alcatel-Lucent as primary vendors for initial LTE deployments. Starent Networks is the packet core vendor.
- 4G LTE trials are underway in the U.S. in Europe with Vodfone’s help (Verizon Wireless is a Vodafone-Verizon joint venture).
- Nokia Siemens Networks and Alcatel-Lucent will supply an “IP Multi-Media Subsystem (IMS) network. The IMS will allow for converged applications on wireless and broadband networks.
- While Verizon is building out LTE service it expects to continue with 3G service “well into the next decade.”
As for the trials, Verizon Wireless and Vodafone are testing 4G LTE networks in the following areas in Minneapolis, Columbus, Ohio, and Northern New Jersey and in Budapest, Dusseldorf, and Madrid in Europe. Once those trials are complete, Verizon Wireless said it will ramp up deployment through its coverage area.
December 17th, 2008
Sprint unveils dual 3G/4G modem
Sprint has launched a dual 3G/WiMax (4G) modem in a necessary step that buys it some time as its next generation network is rolled out beyond Baltimore.
The telecom company said the Sprint 3G/4G USB Modem U300 will be available in stores–in the Baltimore area for now–Dec. 21. Given that WiMax is far from national today Sprint had to offer a dual mode modem to ensure wireless broadband coverage across the U.S.
Sprint launched WiMax service in Baltimore and plans to roll it out into other markets in 2009. The problem: Once you leave those markets you’re out of WiMax and wireless service. Sprint’s modem will solve that problem. Sprint is betting on WiMax to stop the subscriber churn.
Also see: Clearwire-Sprint make it official, pave way for WiMax rollout
Here’s a look at the technical specs:
- 4G speeds (average download speeds of 2-4 Mbps) in Baltimore today, and soon in other major cities.
- 3G speeds (average download speeds of 600Kbps – 1.4 Mbps) across Sprint’s nationwide network.
- Backwards compatible to the Sprint EV-DO/Rev 0 and 1XRTT networks.
- The modem will connect to the fastest network available.
- The modem will run you $149.99 with a two-year subscription and a $50 mail-in rebate.
For now, this modem is a Baltimore story. In January, Best Buy will also carry the modem. If you’re in Baltimore you’ll find the dual mode modem at Sprint’s stores in Annapolis, Baltimore, Bel Air, Columbia, Glen Burnie, Owings Mills, Hanover and Towson.
December 1st, 2008
Clearwire-Sprint make it official, pave way for WiMax rollout
A mobile WiMax service, called Clear, will soon be here, now that Clearwire and Sprint-Nextel have completed a $14.5 billion joint-venture deal that was announced in May. The new company formed by the deal, which will retain the Clearwire name, will create a 4G nationwide broadband wireless network that will offer download speeds of 2 to 4 megabits per second and operate as an open IP network that will be designed to let any WiMax device to connect to it.
Clearwire previously has said it is receiving a $3.2 billion investment from Comcast, Intel Capital, Time Warner Cable, Google, and Bright House Networks, as well as an additional investment from Trilogy Equity Partners in the coming months. In a statement, Clearwire CEO Benjamin G. Wolff, said:
As we roll out our network across the country, people will no longer have to make the choice between speed and mobility. We are bringing a new mobile Internet experience to customers at speeds previously relegated to fixed locations. With significant spectrum holdings yielding unmatched network capacity, a next-generation all-IP network, and an open Internet business model, Clearwire will deliver a simple value proposition aimed to improve productivity and make the Internet experience more enjoyable, wherever our customers happen to be.
Despite the current economic uncertainty for consumers and businesses, the company said an investment in a wireless infrastructure now will help spark innovative uses of the speeds and technology for the future. Clearwire Chairman Craig O. McCaw called it “an opportunity to do something right the first time, with simplicity and incredible efficiencies… This is far and away the most exciting opportunity in wireless I have seen since the beginning of cellular in 1983.”
Also see:
November 7th, 2008
Sprint: Subscribers continue to bolt
Sprint continues to lose customers to other carriers as the company reported a third quarter subscriber tally of 50.5 million, down from 54 million a year ago.
The company lost 1.3 million wireless customers on a net basis in the third quarter including 1.1 million post-paid. Wall Street was expecting about 1 million subscribers to leave Sprint.
Sprint’s churn rate was 2.15 percent, up from 2 percent in the second quarter (statement). That rate is well above the churn rates of AT&T and Verizon, but better than T-Mobile. Churn for Sprint’s Boost service was 8.2 percent, up from 7.4 percent in the second quarter.
Sprint is our last stop on our financial tour of wireless carriers. Also see:
- T-Mobile: Churn spikes in third quarter
- Verizon’s third quarter on target; iPhone dings wireless churn
- iPhone 3G: Was it really such a great deal for AT&T?
Sprint reported a third quarter net loss of $326 million, or 11 cents a share, on revenue of $8.8 billion. Excluding items Sprint broke even, but Wall Street was expecting a profit of 3 cents a share. In the year ago quarter, Sprint reported a profit of $64 million, or 23 cents a share, on revenue of $10 billion. Simply put, the Sprint fall off has been dramatic.
The company’s challenges are clear. Keep customers, improve customer service and push new devices to get so-called prime subscribers that will pay their bills.
Here’s the customer service improvement touted by Sprint:
Sprint said 83 percent of its post-paid customers were “prime.” In other words, 83 percent of their customer base can pay the bills. The other customers are basically sub-prime–perhaps that’s why Boost churn is so high. The company said it is 
upgrading its customer base (right). If Sprint can recruit higher-end customers they will spend more and stick around.
Overall, the company is making some progress. It swapped a $6 billion credit line for a smaller one $4.5 billion. Sprint also paid down $1.1 billion of debt. And Sprint’s venture with Clearwire was approved by the FCC. That deal will lower Sprint’s capital spending as it rolls out WiMax in cities such as Baltimore.
Nevertheless, Sprint sees tough times ahead. In a statement Sprint gave the following outlook:
Sprint Nextel expects continued pressure on post-paid subscribers in the fourth quarter; however, we expect that gross adds will stabilize and that churn rate will be consistent with the third quarter. We also expect slight downward pressure on post-paid ARPU in the fourth quarter.
Sprint added that its operating income adjusted for depreciation and amortization will fall, but it is generating positive cash flow.
By the numbers:
- Sales, general and administrative expenses fell 11 percent from a year ago.
- Nine percent of post-paid customers upgraded handsets in the third quarter.
- Wireless service revenue was $6.8 billion, down 13 percent from a year ago.
More:
Beyond mobile broadband, WiMAX is about blowing up the wireless business model
November 5th, 2008
FCC opens up wireless 'white spaces;' Assessing winners, losers and wild-cards
The Federal Communications Commission has opened up so-called wireless white spaces–unused spectrum between broadcast channels–in a move the agency hopes paves the way for ‘Wi-Fi on Steroids’.
In a statement following the FCC’s 5-0 approval (Techmeme), Chairman Kevin Martin said:
Opening the white spaces will allow for the creation of a Wi-Fi on steroids. It has the potential to improve wireless broadband connectivity and inspire an ever-widening array of new Internet based products and services for consumers. Consumers across the country will have access to devices and services that they may have only dreamed about before. I fully expect that everything from enhanced home broadband networks, to intelligent peer-to-peer devices, and even small communications networks will come into being in TV “white spaces.”
Martin added that the FCC will ensure that this spectrum won’t interfere with other broadcasts to allay critics, but it’s a big win for technology firms such as Google, Intel and Motorola. Here’s a look at the potential winners, losers and wild-cards:
Winners:
Intel: The chip giant is hands-down a big winner. Like Wi-Fi–and now WiMax–Intel will make chips with technology embedded to take advantage of this spectrum.
Google: Let me get this straight: Google prods the FCC to open up the airwaves. It enters bidding for 700 Mhz spectrum, jacks up the auction prices for carriers, doesn’t actually bid and now gets handed spectrum that’s arguably more valuable. Nice job, Google. Google’s Larry Page said in a blog post:
I’ve always thought that there are a lot of really incredible things that engineers and entrepreneurs can do with this spectrum. We will soon have “Wi-Fi on steroids,” since these spectrum signals have much longer range than today’s Wi-Fi technology and broadband access can be spread using fewer base stations resulting in better coverage at lower cost. And it is wonderful that the FCC has adopted the same successful unlicensed model used for Wi-Fi, which has resulted in a projected 1 billion Wi-Fi chips being produced this year. Now that the FCC has set the rules, I’m sure that we’ll see similar growth in products to take advantage of this spectrum.
All of that’s true and guess what search and services will ride on top of this spectrum? Yup. Google’s. Another thread is that Google will run to these white spaces to create a third broadband pipe to the home.
Motorola and Cisco: Martin spoke of “enhanced home broadband networks” that can flourish with this opened spectrum. The big players–from the set-top box to the wireless routers–are Motorola and Cisco.
Consumers: This new spectrum is likely to result in a bevy of services–and devices–to use. More importantly, opening this spectrum is going to bring us closer to always-on wireless broadband access.
Losers:
Verizon and AT&T: The likes of Verizon and AT&T have been paying billions for spectrum and now these white spaces create more competition. In other words, the moat around the wireless carrier business model isn’t as strong as it was. The monolithic carriers will face competition from upstarts using white space spectrum as well as smaller rivals such as T-Mobile and Sprint.
WiMax, Sprint-Clearwire: The Sprint-Clearwire WiMax joint venture also was approved by the FCC on Tuesday, but there’s a nagging issue: I thought WiMax was “Wi-Fi on steroids.” There are multiple details to be worked out, but I wonder if WiMax will ultimately be just a bridge technology.
The FCC coffers: The FCC has garnered billions in wireless auctions and while advocates of white space spectrum have noted that it won’t interfere with licensee rights you have to ponder about the impact on future auctions. Will carriers pay up for in the future?
Wild-Cards:
Business models and carrier response. In an interesting note, Stanford Group analysts Paul Gallant and Paul Glenchur wrote:
There is a fair amount of noise around the FCC vote on “white spaces,” but for now, there appears to be little to worry about for existing broadband providers (cable/telcos). The reason is that there is no clear business model for this spectrum to create additional competition in the broadband market. It’s even possible that existing broadband providers (Comcast, Verizon, AT&T, Time Warner Cable) could decide to follow Cablevision’s lead and co-opt these “white spaces” frequencies to provide a new mobile broadband option throughout their footprints.
The business model point is notable, but for the hardware vendors that will enable white space spectrum there will be new product cycles. Services providers will also rely on advertising. Stanford’s second point is also interesting. Broadband providers–especially cable companies and wireless firms with weaker coverage (like T-Mobile)–can also benefit.
October 13th, 2008
Beyond mobile broadband, WiMAX is about blowing up the wireless business model
On Wednesday in Baltimore at the official launch of America’s first mobile WiMAX network, Sprint CTO Barry West said that if this was only about launching a new type of network with faster performance then it would be significant. However, it is abundantly clear that for West, Sprint, and their band of high-profile WiMAX partners, this is about a lot more than just a faster mobile network.
What is it about? What’s the subtext? Here’s my interpretation:
- It is about unleashing a new generation of applications and devices with broadband connectivity.
- It is about changing the balance of power in the cellular industry.
- It is about bringing wireless broadband to the masses by making it less expensive and more open.
- It is about turning the U.S. from a laggard into a leader in the mobile world.
- It is about a bunch of underdogs who are trying to leapfrog a set of powerful, entrenched leaders.
Sprint’s Barry West celebrated the launch of WiMAX by ceremonially cutting Ethernet cables, even though it’s the cellular companies Sprint is really going after with Xohm. Photo by Jason Hiner
Is this really the beginning of WiMAX?
I’ve seen a number of consumers in the U.S. respond to news of the official U.S WiMAX launch in Baltimore by saying. “This isn’t new. My town has had WiMAX for a couple years.” What’s going on here is that several smaller cities in the U.S. already have a version of WiMAX called “Fixed WiMAX” based on the 802.16d protocol.
Jason Hiner is the Editor in Chief of TechRepublic, ZDNet's sister site. Read his blog Tech Sanity Check at hiner.techrepublic.com. You can also find him on Twitter, LinkedIn, and JasonHiner.com.
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