Clearwire will eventually transition from a WiMax-based 4G network to an LTE (Long-Term Evolution) 4G network, Clearwire COO Erik Prusch revealed in an interview with Cnet.
Using Clearwire technology, Sprint-which owns a 50-some-percent share of the company-launched its 4G network in 2008, years ahead of its competitors. While Verizon, T-Mobile and AT&T are just now catching up, the types of 4G technology they’ve chosen-LTE and the LTE precursor HSPA+-are expected, as Clearwire and Sprint know well, to ultimately be the leading 4G technologies worldwide.
“WiMax to date has been a very good technology choice for us,” Prusch said, according to the May 19 report. “We were able to take advantage of the speed to market before LTE was even a glimmer in anyone’s eye. But we recognize the ecosystem in the U.S. will be larger for LTE than WiMax, so we are conscious of that.”
Clearwire has had funding issues for some time now. For the first quarter of this year, it reported revenue of $242 million and added 1.8 million subscribers, but nonetheless reported a loss of $226.96 million. With $1.2 billion of cash on hand, the company is feeling forced to pace its retail efforts, despite retail customers being responsible for the majority of its revenue ($181.1 million of that first-quarter $242 million).
Still, Clearwire will wait to make the transition to LTE, Prusch said, until the ecosystem and its technology are mature.
“We are technology agnostic,” he said. “We don’t believe that customers buy a technology. They buy fast and reliable access to a data network.”
Clearwire and Sprint rely heavily on one another, to a degree some analysts find problematic. While Sprint has struggled a bit to compete against the iPhone-wielding AT&T and Verizon, it has had to financially assist Clearwire as a means of looking out for its 4G network.
Like Prusch, Sprint CEO Dan Hesse has hinted that LTE is in Sprint’s future. Hesse told the Financial Times in July 2010 that Sprint was considering rolling out LTE alongside its WiMax technology.
“We have spectrum resources where we could add LTE if we choose to do that, on top of the WiMax network,” Hesse told FT. “The beauty of having a lot of spectrum is we have a lot of flexibility.”
In the same report, FT added that T-Mobile parent company Deutsche Telekom had considered purchasing Sprint and merging it with T-Mobile, but ultimately decided against it, given that Sprint was invested in WiMax, while T-Mobile’s 4G roadmap had it moving from HSPA+ to LTE.
AT&T, whose 4G path likewise includes transitioning from HSPA+ to LTE, has since made a $39 billion bid for T-Mobile, which has enough spectrum to enable AT&T to eventually extend 4G service to more than 97 percent of the country-but not enough capital, T-Mobile CEO Phillip Humm has said, to enable it to follow through on its LTE plans.
Clearwire’s Prusch remained positive about the company’s outlook, insisting that it currently has more spectrum than anyone and just needs to get to the point of growing its revenue organically. In December, the company sold $1.3 billion of debt to fund the continued buildout of its WiMax network.
“Our subscriber numbers are growing rapidly, and the usage stats show us that there is a desire and demand for more capacity,” he said. “So we feel we are well-positioned to meet those needs. We have more spectrum assets than anyone else, and we can handle more capacity than any other carrier.”
