Xohm Gets Rolled into Clearwire, New Mobile WiMAX Network Gets $3.2 Billion from Intel, Google, and Cable Operators

Mobile WiMAX isn’t dead! Maybe. Sprint and Clearwire have been bailed out by some pretty rich partners. The two companies have agreed to combine their WiMAX wireless broadband businesses to form a new wireless communications company called Clearwire. (Yes, I guess the Xohm brand is dead.) The goal: “to accelerate the deployment of a nationwide mobile WiMAX network in the U.S.”

According to the press release, the new Clearwire is targeting a network deployment that will cover between 120 million and 140 million people in the U.S. by the end of 2010. Intel, along with Google, Comcast, Time Warner Cable, and Bright House Networks, have invested a combined $3.2 billion into the new company. I had a chance to sit in on a conference call this morning with both Sprint CEO Dan Hesse and the new Clearwire CEO Benjamin Wolff. Here are some of the highlights.

Sprint CEO Dan Hesse claimed that the new Clearwire will still be at least two years ahead of the competition. I wonder if this will hold true given all of the shuffling going on. If this $3.2 billion investment was needed, you would think the deployment wasn’t going so smoothly. How soon can this money make a real difference? And will it make a significant difference before LTE becomes a reality for AT&T and Verizon Wireless?

Comcast, Time Warner, and Brighthouse to roll out mobile services and get in the quadruple-play game. Basically, these cable operators will become Clearwire MVNOs. This makes sense on the surface, but Mobile WiMAX is not optimized for voice, which means all three providers will need to work closely with Sprint to ensure that dual-mode CDMA/Mobile WiMAX devices are available at launch. And dual-mode devices didn’t seem to be a top priority for Xohm. Sprint and Clearwire will have to get cracking on those devices with partners like Motorola and Samsung . . . fast.

Benjamin G. Wolff, Clearwire CEO says the Portland Mobile WiMAX network being rolled out now offers 5 to 6 Mbps on the downlink and 2 to 3 Mbps uplink even at 60 mph. It will offer true broadband on the go. Xohm claimed 2 to 4 Mbps on the downlink. Wonder what the real-world speeds will be at launch?

Clearwire will have 3X as much spectrum once this transaction closes. And a more combined spectrum than recent 700-MHz spectrum auction winnings. It will deliver 4X performance and 1/10 the cost of traditional mobile broadband services. Mobile WiMAX will enable users to download full movies quickly. Vision is to deliver rich Internet experience by delivering ExpressCards and embedded chipsets first. In 2009, WiMaAX chipsets will hit consumer electronics. Price per share of the new combined company will be $20 per share., and the deal should close at end of 2008. The plan is to fundamentally transform the communications landscape.

Q&A Highlights

  • Android will be a preferred platform but won’t be exclusive when it comes to mobile devices.
  • Dan Hesse from Sprint didn’t rule out possibility of using LTE for the Sprint network in the future but the focus for now is on Mobile WiMAX as the 4G strategy.
  • Expect to see single-mode and dual-mode devices (CDMA/Mobile WiMAX) in terms of computers and handhelds, so roaming will be possible.
  • Clearwire has said it has 30 million POPs in terms of development and construction. Once deal closes, it will spring into more POPs. Can’t make any commitment on 2008 and further deployment. Sprint expects to have roughly 15 million POPs by the end of the year.
  • It takes 12 to 18 months to launch a market from start to finish.
  • LTE trials, according to new Clearwire President Barry West, will be end of 2010. He says they want to go as fast as they can, but it’s a matter of logistics. CEO Ben Wolff says Clearwire will still be one of fastest massive wireless network build-outs. Capital that Clearwire has a result of transaction should get them through 2010.
  • The company will focus initially on the top 100 markets and will look to build thorough coverage in those markets, filling in the rest as it continues to build. It is very focused on lower cost-per-bit delivery but able to charge the same amount as traditional 3G (about $60) now in trials because of speed advantage. Can compress prices if needed, however.

That’s it for now. My take? Given that the new Clearwire won’t have a national footprint until the end of 2010, Mobile WiMAX is going to be a tough sell both to consumer electronics manufacturers and notebook makers—even with Intel’s influence—given that LTE will be just around the corner. And it’s disappointing to hear that pricing won’t necessarily be more aggressive than traditional EV-DO or HSDPA. Everyone I have spoken to about Mobile WiMAX has said that the lower-cost chips should lead to cost savings to the end user when it comes to equipment but also monthly service fees. The new Clearwire certainly has a lot of heavy hitters in its corner, and one shouldn’t underestimate the influence of cable providers such as Comcast and Time Warner that desperately want a piece of the 4G pie to remain relevant in the wireless age. However, given that both AT&T and Verizon Wireless are getting behind LTE as the 4G technology of choice—and presumably T-Mobile down the road—Clearwire will need all the help it can get to roll out its network and get people excited about Mobile WiMAX. I think Mobile WiMAX got a stay of execution today. Now it’s time to execute.

Mark Spoonauer
Mark Spoonauer
Responsible for the editorial vision for Laptop Mag and Tom's Guide, Mark Spoonauer has been Editor in Chief of LAPTOP since 2003 and has covered technology for nearly 15 years. Mark speaks at key tech industry events and makes regular media appearances on CNBC, Fox and CNN. Mark was previously reviews editor at Mobile Computing, and his work has appeared in Wired, Popular Science and Inc.
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