The Industry Standard - Why it’s too early to call the WiMax deal a disaster - Comments

The new Clearwire will

Jim A — Wed, 14 May 2008 05:39:32 -0700

The new Clearwire will succeed primarily in the large Urban markets where the OFDM feature of WiMAX will allow the (Lame) 2.5Ghz spectrum to operate effectively-multipath will rule as long is there is not a great deal of foliage.
However, I am sure the big investors recognize that in order to be competitive (in the 2011-2012) time frame against the planned deployment of 700Mhz based LTE systems by Verizon Wireless (first) and then AT&T, they will need to deploy a newer network based on AWS or a Sub 1Ghz based spectrum that will provide for true Universal coverage (penetration of trees and infrastructure 2.5Ghz system cannot accomplish) in Urban and rural markets.
Intel will need to bite the bullet and address the shortcomings of the 2.5Ghz spectrum and come up with a tri or quad band Centrino system that will handle WiMAX (AWS or White Space), WiFi, initially 3G to be replaced with 700Mhz LTE.
I expect the MSO to come into play here and offer their AWS spectrum as an alternative in that it includes some 20Mhz of Licensed spectrum pretty much nationwide.

Jim A (aka Jacomo)

I think Wimax will be fine.

Kobe Wadsworth Airmaxed — Mon, 12 May 2008 20:22:29 -0700

I think Wimax will be fine. Sure there will be trial and errors.Little bugs tweak's hear and there. After all has Intel ever had a failure. If they have no one's talking about it. Like it or not this is the final frontier in communications, audio,video, data,tv, things are going to look good for this technology real soon..We will all be wondering how we lived without it.

Why it’s too early to call the WiMax deal a disaster

Venture Beat — Mon, 12 May 2008 16:17:20 -0700

Well, TechCrunch’s Erick Schonfeld certainly isn’t pulling his punches. Last week, while most reporters (including me) were writing enthusiastically about the new partnership between Sprint and Clearwire to build a mobile wireless network using WiMax technology, Schonfeld slammed the deal as “a disaster waiting to happen.” Then he followed up on Friday with even more reasons why the deal is a bad idea.

So did I jump the gun? Was I (along with Eric Schmidt, chief executive at Google, which invested in the deal), “snookered”? I’m not convinced, nor were a couple wireless experts VentureBeat spoke to. Schonfeld certainly does a compelling and thorough job of outlining the many risks and unknowns involved in the deal, but he may be missing the bigger picture: Despite the risks, the deal is a calculated gamble that could pay off.

Schonfeld’s biggest argument is that WiMax has until now been a “fixed” wireless technology (in other words, it provides wireless service in your home and office), rather than mobile, and it hasn’t proven itself as a workable business in that field, either. For example, Clearwire’s network will be the heart of the new partnership, yet Clearwire lost $727 million last year. Also, in order to work, WiMax chips must be installed on laptops and cell phones, which hasn’t happened much yet.

These are all fair points, but I’d argue that collectively they mean the fate of the partnership is unclear, not that it’s a guaranteed failure. For one thing, it’s a mistake to assume that Clearwire and WiMax’s history are good predictors for how this new company (which will also be called Clearwire) will perform. After all, the deal brings plenty of new players — such as Google, Intel Capital, Comcast and Time Warner, who are all investors — into the mix, not to mention $3.2 billion of fresh funding.

“[Schonfeld is] assuming that Clearwire’s current model will be the one going forward, which is highly unlikely,” says Paul Grim of SunBridge Partners. “The name on HQ may be Clearwire, but the $3.2 billion raised suggests the other parties may have a say in how things play out.”

It’s also worth noting that WiMax may be relatively unproven, but the new company will still be deploying ahead of the competing LTE technology, which is a smart move. As Intel Capital’s Arvind Sodhani told us, “We can’t wait three years.” (Keep in mind that Sodhani has a horse in the race, since Intel is a leading provider of WiMax chips.)

Finally, as Rich Wong of Accel Partners told us, the investment makes sense as a calculated gamble as part of Google’s efforts to ensure open mobile networks.

“Consider that one of their alternatives would have been to try and build a complete network off of 700 Mhz spectrum,” Wong said. “This is a far more cost-effective way of driving to this form of open standard.”

So, yes, that’s a lot of money to pour into an unproven technology. But there are plenty of reasons to be excited too, and I’ll wait for more warning signs before joining in TechCrunch’s doom and gloom.