Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
Is there a more perplexing wireless operator in the domestic market than Clearwire? Sure, there are “carriers” that have some strange business models or build out plans (cough, cough, LightSquared, cough) that have yet to actually do anything, but with Clearwire you have a functional operator that is serving customers and yet seems to be constantly teetering on the brink.
It would not surprise me to wake up any day to see that the company is ready to take over the world or completely dissolve. Literally, either one of those headlines would not surprise me.
I know the wireless industry has a history of carriers that have been through tough times that resulted in selling out or adjusting their operations (cough, cough, NextWave, cough), but for some reason in the current environment I can’t seem to get enough of Clearwire’s seemingly soap opera existence.
Here is a wireless carrier with deeper spectrum holdings than Mother Nature, no legacy network assets it needs to protect and a functioning next-generation wireless network that seems to work pretty well. Also, a company that while seemingly has been going through executives at an alarming rate, has also managed to attach itself to some of the most illustrious names in the wireless industry that would make a wolverine purr.
Some of those names attached to Clearwire include Craig McCaw, John Stanton, Ben Wolff, Google, Best Buy, Comcast and Sprint Nextel, amongst many others. These are not fly-by-night people or companies.
And yet it seems like only a matter of time before there appears to be discontent amongst the operations of Clearwire and many of these people attached with the company.
This week one of its initial investors, Intel, said it would dump up to 10 million shares of the company, or roughly 10% of its holdings. While this is not a move that will see Intel completely distance itself from Clearwire, it does show that there is some questions about that relationship.
Until recently Clearwire couldn’t seem to find common ground with its biggest investor Sprint Nextel over something that seemed as simple as to what they would charge each other for Sprint Nextel customers using Clearwire’s network. Sure, these sort of details are important to the bottom line of a company that is increasingly becoming reliant on that customer base, but you would think that the majority owner and main source of income for Clearwire would lead to some increased emphasis on getting this done.
This all comes as the carrier continues to look for long-term funding to continue building out its WiMAX network beyond the 130 million or so customers currently “covered,” or to fund the deployment of LTE technology on that network that if done aggressively could turn the market on its ear. Maybe Clearwire is the smartest person in the room and playing a high stakes of chicken that it knows its partners can’t let it lose? But, with the “4G” market set to become quickly saturated beyond just the marketing hype, that would seem to be a dangerous game indeed.
I have heard repeatedly from folks that have worked with Clearwire on its deployment how innovative the carrier’s network is in the use of microwave for backhaul and its ability to generate coverage using the 2.5 GHz spectrum band. But, I have also experience the network that seems to have trouble penetrating paper-thin buildings, providing coverage that seems to be promised from its maps and for some reason can’t provide upload speeds much faster than what legacy 3G networks can offer.
It’s just all so confusing, and delicious.
As a person interested in following the news angle of Clearwire’s existence, I am all for this soap opera continuing. And, with so much of its current existence still up in the air, chances are that hope will be realized.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–I have never actually seen a “dog and pony” show, but I can only assume they are similar to what is being witnessed in Washington, D.C., in connection with the proposed AT&T acquisition of T-Mobile USA. This week leaders from those in favor of the deal – i.e. AT&T – and those opposed – i.e. nearly everyone else – sat/stood/prostrated themselves in front of Congress to make their case for why or why not this deal should or should not happen.
The arguments seemed to be the same that have already been proffered by both sides since the deal was announced a few months back, so there was really nothing new on that front. There was a bit of intrigue in having the execs from some of these firms on hand for a bit of high-level exec back and forth, but beyond that the show seemed more for the cameras and quotes than for any actual new news.
I know that these companies deserve the right to provide their side of the story and all, and some of the information they provided could have actually been new news to those handling the meeting. But, I think even from this far out most are confident that regardless of the he-said, she-said polemics that this deal will get passed with mandatory divestitures. Both sides will scream that they got screwed, but in the end life will go on.
–In a somewhat related piece of news, Federal Communications Commissioner Meredith Atwell Baker said she plans to leave the FCC when her term is complete next month to join NBC Universal as senior BP of government affairs. I am guessing that should be a comfortable move for Baker seeing as she did just vote to approve NBC Universal’s acquisition by Comcast. How does this not look like some sort of conflict of interest? I know people are free to go where they please for a job, but come on!
I welcome your comments. Please send me an e-mail at: dmeyer@rcrwireless.com.
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