There's an old adage that Microsoft usually doesn't get it right in its first release, but keeps on trying and eventually gets there. Clearwire is hoping the same holds true for them.
You've probably read about the latest incarnation of Clearwire. The new company using that name includes Clearwire and Sprint's spectrum, mobile WiMAX networks and resources; a $3.2 billion investment by Intel, Comcast, Time Warner Cable, Bright House Networks and Google; plus various business commitments from the partners regarding chips, search, operating system and MVNO relationships. See the Sprint press release ( newsreleases.sprint.com/phoenix.zhtml?c=127149&p=irol-newsArticle_newsroom&ID=1141088&highlight= ) for the details.
Over the past five years, we've tracked four versions as Clearwire has evolved.
In March 2003 we wrote about our first hands-on experience with Clearwire in Clearwire in Jacksonville: A Wireless Case Study in Progress ( www.broadbandhomecentral.com/report/backissues/Report0303_4.html ). At that time, Clearwire was focused on competing with cable and DSL and also targeted vertical markets like real estate brokers who needed fixed access in multiple locations around town. The equipment came from IP Wireless.
We were able to read the morning New York Times on the Web while driving around Jacksonville -- at least while we were in range. The service got some limited adoption.
In December 2004 we were back in Jacksonville to try the next version of Clearwire. As we described in Portable Broadband: A Tale of Three Cities ( www.broadbandhomecentral.com/report/backissues/Report0412_5.html ), version 2.0 was almost entirely different--its name and spectrum were the only remnants from version 1.0.
Craig McCaw had purchased Clearwire in April 2004, and in August 2004 the company relaunched service in Jacksonville, now using equipment from NextNet Wireless (also owned by McCaw). They still were not targeting mobile users because their CPE consisted of a comparatively large unit. Clearwire was undergoing some limited expansion into third-tier cities in the US.
Fast forward to July 2006. WiMAX technology had come on the scene and big companies really started putting some skin in the game. With the focus shifting to Targeting The Mobile Internet ( www.broadbandhomecentral.com/report/backissues/Report0606_4.html ), Intel and Motorola announced that they were investing $900 million in Clearwire. Motorola purchased Clearwire's wireless hardware subsidiary, NextNet Wireless, whose technology was suddenly called "pre-WiMAX". At the same time, Sprint Nextel announced that it would use WiMAX as its mobile broadband 4G standard.
In July 2007 Clearwire and Sprint signed a letter of intent to build a nationwide WiMAX network, with Sprint focusing on the major urban areas and Clearwire more focused on rural areas. At WCA 2007, Sprint Nextel's CTO Barry West addressed the question of why Sprint planned to put several billion dollars into a WiMAX network ( www.broadbandhomecentral.com/report/backissues/Report0704_4.html ). His answer was that the last phase of wireless growth was driven by voice, and the next phase will be being driven by data, which needs a wider channel and a technology that scales in a linear way.
However, technology was not the key -- the business model was. West believes in an open mobile Internet model, where the customer buys an unlocked device and subscribes to a service. Since the service provider is not selling and subsidizing the phones, they no longer need to keep a customer restricted to content they provide or approve. Sprint soon coined the name XOHM for its WiMAX venture and named West as president.
With all the upheaval at Sprint during the fall of 2007, culminating in the departure of Sprint's CEO Gary Forsee, Sprint and Clearwire announced they had been unable to reach a definitive agreement and had terminated their letter of intent.
...and now Version 4.0
So we have now arrived at Clearwire Version 4.0. Sprint and Clearwire are back together again, along with a formidable group of investor allies. The learning from the past is brought to the venture, with:
The resources and knowledge are all there for Clearwire 4.0 to make it. The open question is whether any management team is up to the formidable task of harnessing such a wide range of business interests and channeling them toward building a robust network, upon which each of the parties can successfully realize its own vision of pricing, branding, and rollout timing.