Wednesday, October 3, 2012

Clearwire is up for grabs.

T-Mobile and Metro PCS today announced their merger and in related news, gaining less attention, Comcast announced that they were jumping ship from Clearwire after last months announcement that fellow cable operator Time Warner Cable was doing the same.

While some people probably see this as reflecting poorly on Clearwire, I would say that there are two major forces at play here.

First, cable is getting out of wireless. This has been a less than successful venture for most cable operators to try and get in on wireless. Unfortunately, the opportunities that seemed so rock solid some years ago did not materialize. This may partly have something to do with lack of speed and innovation on the cable operators part. If you think your wireless carrier is slow-moving and behind the times, take a look at cable. Not a great matchup.

Second, Clearwire is a huge opportunity for the wireless carrier that dares to be bold. Sprint, which owns a huge minority stake in Clearwire has had so many internal troubles over the past years that they have been unable to realize the potential in Clearwire. But to be fair, it is not until now that the technology window of opportunity has opened for Clearwire. 

The company originally deployed a WiMax network which was always going to be a non-starter, but recently a very efficient version of 4G, TD-LTE has come around, largely thanks to the Chinese market. This coinciding with similar spectrum holdings in Europe and elsewhere waiting to be utilized has finally created an opportunity for a global device ecosystem developing for the Clearwire spectrum band.

This means that if you believe that wireless data consumption will continue to grow at least over the coming years, Clearwire has one of the widest spectrum positions in the US market coupled with one of the best technologies to alleviate the data crunch, at least in a year or two.

This could be an opportunity for Sprint to finally regain hold of Clearwire and integrate it into its own network, or for T-Mobile or even AT&T to come in as co-owners and secure spectrum and data capacity for their customers as they grow.

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