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Milledgeville aside, Clearwire still focused on big markets

WiMax network launches of late have gone into more towns than cities, but Clearwire’s Sievert says rollout going forward will target the major metros

Clearwire (NASDAQ:CLWR) may have been bulking up its WiMax footprint with smaller markets lately, but chief commercial officer Michael Sievert said it would be wrong to draw any conclusions about Clearwire's strategy from those recent trends. The company is still focused on the big markets, he said, and while it will continue to upgrade its older fixed wireless networks in the heartland, most of the major activity going forward will be in the top-tier metropolises.

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"Our original strategy with pre-WiMax focused on those smaller markets," Sievert said in a recent interview. "It's not costly to convert those markets to WiMax. Most of the company's growth going forward, though, will come from the big cities."

Since the beginning of the year, Clearwire has increased its WiMax footprint from a mere two markets to 14, but only two of them—Atlanta, Baltimore, Las Vegas and Portland, Ore.—would be considered major cities. The rest have been markets like Killeen, Texas, or Bellingham, Wash., where Clearwire already offers a broadband wireless service using Motorola's proprietary NextNet technology. In those markets Clearwire has several advantages, including established radio and backhaul infrastructure, a sales and marketing force already in place and much smaller areas to cover than in large Greenfield deployments, Sievert said.

Clearwire has another 30 pre-WiMax markets throughout the US it can upgrade to full-bore 4G networks, but while the operator will continue to convert those networks they won't be the first priority, Sievert said. The remainder of Clearwire's launch schedule for 2009 focuses on the metro areas, some of which like Seattle and Honolulu are pre-WiMax markets but most of them are from-scratch builds. Austin, San Antonio and Dallas-Fort Worth will round out what is becoming an extensive Texas footprint. Clearwire is targeting Charlotte, Greensboro and Raleigh in North Carolina and plans to major, though more isolated launches in Chicago and Philadelphia. Also, Clearwire will also expand outwards from its current markets. Today it announced it has extended its Atlanta network to include Milledgeville, Ga., and its Portland network to include Salem, Ore.

The 80 markets Clearwire will have live by the end of 2010 will include many of those smaller market upgrades, but the focus will still be on the metropolis, bringing Clearwire's total pops covered up to 120 million, Sievert said. "All of those pre-WiMax markets are not equally easy to upgrade," Sievert said. "As a matter of pragmatism, we'll pursue each of those markets as they become most important to our business plan."

Moving into the big cities also makes sense for Clearwire's marketing plans, which will need to focus on the major media markets. "We will be a national operator, coast-to-coast," Sievert continued. "At a certain point, when we get to 100 million [points of presence (POPs)], it will make sense for us to start doing some advertising nationally."
Clearwire's biggest competitive threat is Verizon Wireless (NYSE:VZ, NYSE:VOD), which, though a year behind Clearwire's launch, is pursuing a very aggressive deployment schedule for its long-term evolution networks. Verizon plans to launch in mid-2010, but will projects a 30-market footprint covering 100 million POPs by the end of that year. Compared to Clearwire's 80-market, 120-million-POPs projection, Verizon's plans appear to focus on the largest of the metro markets, meaning it might even beat Clearwire in launching key cities such as New York or Los Angeles. Verizon isn't shying away from a fight: It's tasked its radio vendors Alcatel-Lucent (NYSE:ALU) and Ericsson (NASDAQ:ERIC) to build their first networks in Seattle and Philadelphia, two cities Clearwire will take live this year.

Even if Clearwire loses its first-mover advantage in a few markets, it will still have the overall advantage with more than a year to establish its Clear brand, service and business model on a national scale, Sievert said. When Verizon does enter the picture, it will be joining a market, not defining it, Sievert said.

"4G isn't just about being the first mover," Sievert said. "It's about experience with 4G, it's about devices, it's about applications. … If competition comes forward, it will only bring about 4G faster."

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© 2014 Penton Media Inc.

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