CTIA: Sprint, Clearwire CEOs tout video as a 4G driver

Though they stopped short of calling it 4G’s ‘killer app,’ both Sprint (NYSE:S) CEO Dan Hesse and Clearwire (NASDAQ:CLWR) CEO Bill Morrow said video would be one of the key services for 4G during their back-to-back keynotes at CTIA Wireless’ WiMax-centric second day.

Not only will video services such as Hulu and YouTube shine on WiMax’s wide open data network, but vertical markets such as telemedicine will benefit from the increased video capacity, Hesse said. The anticipated rise in video usage over 4G, was one of the key reasons Sprint sought out Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC) and Bright House Communications as partners when it invested in Clearwire, Hesse said. The cable industry’s prime focus is the distribution of video and multimedia programming, so 4G is the logical point of entry for cable operators seeking a wireless strategy.

“Do you want the cable companies with you or against you?” Hesse said in response to a question in a Q&A session with CTIA CEO Steve Largent. “The cable companies make a tremendous amount of sense, getting them into our camp.”

Morrow addressed similar themes in his Q&A with Largent, saying that video consumption has been ballooning online driven by new video-on-demand services as well as user-generated content sites—and that traffic is beginning to seep into wireless. Cisco Systems (NASDAQ:CSCO) recent visual networking index projected that mobile video traffic will comprise 64% of all mobile data traffic in 2013, and a recent Allot Communications (NASDAQ:ALLT) analysis of live networks found that a single service, YouTube, is already consuming 10% of mobile broadband capacity. While all of that video traffic is currently traversing—and clogging up—3G networks, 4G networks like Clearwire’s will be able to support it with relative ease, Morrow said. “4G is going to be the delivery mechanism,” Morrow said.

Though it has only one year of commercial service under its belt, Clearwire is seeing huge spikes in data consumption, Morrow said. Clearwire even has users that have consumed more than a Terrabyte of data, though the average customer uses about 7 GB a month. Compared to the 1.5 GB a month the average 3G mobile broadband user consumers, 7 GB is significant, Morrow said, and Clearwire has plenty of room to grow those numbers. Morrow pointed to studies that estimate 3G operators start losing money once their customers exceed 3 GB to 4 GB of monthly data usage. Clearwire, however, could easily double its average and still remain firmly in the black, he said.

On Tuesday, Sprint unveiled its first 4G handset, the HTC Evo 4G. The dual-mode CDMA-WiMax handset will be the first 4G smartphone in the US, which will give Sprint as much as a year to establish its 4G service in the US before long-term evolution like Verizon Wireless (NYSE:VZ, NYSE:VOD) and MetroPCS (NYSE:PCS) get their first handsets.