Clearwire goes 3G
The funny thing about mobile broadband is that people actually want to use it while mobile. Clearwire has warmed to that notion, announcing today that not only will majority owner Sprint become a mobile virtual network operator on Clearwire’s WiMAX network, but Clearwire will become an MVNO on Sprint’s EV-DO 3G network. The result: Clearwire’s mobile broadband footprint will expand overnight from four markets covering only a few handfuls of millions to a coast-to-coast network covering hundreds of millions within and without all of the country’s major metro regions.
Of course, it will cost customers to the tune of double what they pay for the Clear service at home — $80 a month as opposed to $40 — and they’ll likely have to make do with slow speeds while coping with stringent data caps when roaming on the 3G network. But the offer fills an important hole in Clearwire’s service portfolio.
Clearwire probably has no trouble convincing everyday consumers in its launch markets of the value of its home and mobile broadband service, especially with rates as low as $20 a month for residential access. But several of the key audiences for its service — professionals, field-force workers and, in particular, enterprises — likely are turned off by its tiny footprint. Not only do they have to cope with lack of signal when they leave the city limits, if they wind up in a dead zone in their home markets there’s no mobile network to fall back on. Those workers presumably are the high-value customers — the ones willing to pay a premium for a nationwide service. But while they may have money to spend, it’s highly unlikely they would sign up for Clearwire at home and foot the bill for another 3G broadband service on the road.
Ultimately, the 3G/4G service is a temporary Band-Aid, which Clearwire needs while it builds WiMAX nationwide and is forced to compete with the cellular operators’ nationwide 3G plans. As its footprint expands to all of the major metro markets, it probably can get away with offering a 4G-only nationwide — though not ubiquitous service — but it might keep around the 3G component for the hard-core road warriors and vertical markets.
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