Clearwire slows WiMax launch

“Clearwire is unquestionably attempting to pull off a truly massive undertaking: building a national mobile network without fully committed funding in competition with at least two potent competitors using a radical new technology – as a publicly-held company subject to quarterly scrutiny,” Kainer wrote in a research note. “Success to date speaks to the capability of the assembled team and, as we have modeled, we expect several more years of hard work before reaching cash-flow breakeven. If the prize for success were not so attractive, the scale of the challenge would dismay those who believe that Clearwire can irreparably change today's mobile broadband market into one far more dynamic, open, and useful.”

While new WiMax markets in the large cities may be slower to emerge, Clearwire could sizably increase the side of its footprint if it chooses to convert its legacy fixed wireless networks in 46 markets to WiMax sooner rather than later. Primarily in smaller markets, those networks are powered by Motorola’s proprietary NextNet technology. Clearwire has already begun the engineering planning to upgrade those markets and has a customer base as well as sales and marketing staff already in place. If take-up in Baltimore and Portland is high, Clearwire may opt to immediately convert those networks, giving its WiMax customer base a sizable shot in the arm.

In Portland, Clearwire has opened three retail stores as well as its online portal, all selling residential WiMax service for $20 a month and mobile WiMax for $30 a month. Sprint has also begun its new mobile virtual network operator (MVNO) relationship with Clearwire, releasing last month a 3G/4G CDMA/WiMax card in Baltimore. As Clearwire builds out more markets, its cable investors will presumably also begin offering mobile broadband services to compliment their cable modems.