Is WiMAX’s momentum lost?

Last week, Clearwire revealed its WiMAX rollout plans for this year and next. The schedule — which will add at least eight new markets in 2009 to its current footprint of two — can best be described as cautious. Clearwire is primarily targeting markets in which it already has built, but not launched, infrastructure and in a few cities upgrading proprietary fixed wireless equipment to fully standardized mobile WiMAX.

I can’t blame Clearwire for being cautious. The company’s newly appointed CEO, Bill Morrow, faces a gargantuan task. He must deploy a nationwide network during an economic recession, in which consumer spending on new services will be low. Morrow has to carefully spend the $3.2 billion in capital he has at his disposal, knowing that Clearwire is underfunded and will have to raise more cash in one of the worst capital crises in history. On top of that, Morrow and Clearwire will have to educate a market on a completely new type of wireless service — one in which a customer buys broadband itself, not a specific device. That effort would require the outlay of major marketing and customer-acquisition dollars at a time when customers aren’t just more frugal but also wary of taking chances on new, untested technology.

So I can understand Clearwire’s caution, but I also think that such caution may turn into a huge missed opportunity. Clearwire, and Sprint before it, had huge time-to-market advantage when they announced their WiMAX plans in 2006. But as economic problems for both carriers mounted while the economy deteriorated, much of that advantage has been squandered. Instead of defining the new 4G mobile broadband market, Clearwire likely will devote much of its efforts to keep just ahead of Verizon Wireless, which plans to launch its first commercial long-term evolution (LTE) networks in 2010. There’s a distinct possibility that the first 4G service in New York City will be over an LTE network, not a mobile WiMAX one.

New Clearwire co-chairman Ben Wolff correctly pointed out last week that a nationwide network can’t be built overnight. An initial footprint of 10 major metropolitan markets is an achievement for any operator just starting out. The problem with that argument is that Clearwire isn’t just starting out. The new Clearwire is composed of two WiMAX companies that have been deploying WiMAX networks separately for well more than a year. Here in Chicago, from Telephony’s office building you can clearly see the Motorola WiMAX access points on the building-tops overlooking the Chicago River.