Clearwire still focusing on smaller markets

Clearwire (NASDAQ:CLWR) promised 2010 would be a year primarily devoted large-scale WiMax rollouts in the major metro markets. But -- at least for the first half of the year — it’s falling back on 2009’s strategy of launching new WiMax networks in a handful of large markets while filling its footprint with the numerous smaller markets in between.

Ahead of its Q1 earnings call today, Clearwire released a list of new markets it plans to launch this summer, expanding its 4G mobile broadband service to its own customers as well as its investor-MVNO partners Sprint (NYSE:S), Comcast (NASDAQ:CMSCA) and Time Warner Cable (NYSE:TWC). While some of the largest cities in the US, including New York City, Los Angeles, San Francisco and Boston, are scheduled for rollouts, none of those markets made Clearwire’s list today. Rather Clearwire will launch in seven mid-sized-to-large markets — St. Louis, Kansas City, Nashville, Salt Lake City, Jacksonville, Orlando and Tampa — while upgrading its existing pre-WiMax networks in small markets across the county: Daytona, Fla.; Merced, Modesto, Stockton, and Visalia, Calif.; Wilmington, Del.; Grand Rapids, Mich.; Eugene, Ore.; Yakima and Tri-Cities, Wash.; and Rochester and Syracuse, N.Y.

Those markets are in addition to four small Pennsylvania markets it turned on Monday: Harrisburg, Lancaster, Rochester and York. The largest market Clearwire has launched so far this year is Houston, completing a statewide footprint in Texas covering all of the major population centers.

There’s good reason to believe that Clearwire’s dabbling in small-town America will soon cease, though. Almost all of its smaller market launches have been in towns and communities where Clearwire offered its pre-WiMax fixed wireless and nomadic service built on Motorola’s (NYSE:MOT) proprietary NextNet technology. Those networks were built before Clearwire fully committed to WiMax and had access to Sprint’s 4G spectrum in the big city, so it has been eager to convert those older broadband networks to full-fledged WiMax. With the completion of the markets announced today, Clearwire will have checked almost all of those markets off the list. Only a few pre-WiMax remain such as Anchorage, Ala., and Richmond, Va.

But by packing all of its major metro launches toward the end of the year, Clearwire risks ceding to Verizon Wireless (NYSE:VZ, NYSE:VOD) its competitive advantage in many of the country’s urban centers. Verizon is aggressively building out its long-term evolution (LTE) network, and judging from its announced plans — 100 million pops in 25-30 markets in the fourth quarter -- it will focus solely on the country’s largest markets. The first 4G service residents of New York and San Francisco see could be an LTE service.

Even if Clearwire winds up being second to market in those key cities, it may very well still have an edge over VZW. VZW will be launching with a limited array of devices, while Clearwire and its partners over the last year have built up a device ecosystem of embedded laptops and 4G routers as well as the usual USB dongles. The fancier tablet-style devices such as Samsung’s Mondi have failed to emerge, but Sprint will begin selling the first 4G handset this summer, the HTC EVO 4G. The first LTE handsets won’t be available until 2010, which could give Sprint a considerable advantage in marketing the capabilities of 4G beyond mere broadband access.