After years of promoting WiMAX technology, US wholesaler Clearwire has announced its intention to add the rival 4G technology LTE to its network.
In a statement, it said that it was planning for the initial implementation of LTE to take place in…
After years of promoting WiMAX technology, US wholesaler Clearwire has announced its intention to add the rival 4G technology LTE to its network.
In a statement, it said that it was planning for the initial implementation of LTE to take place in densely-populated urban areas in the US. It gave no date for when this roll-out will take place.
Clearwire is planning to adopt “LTE Advanced-ready” technology. “LTE Advanced” is a standard that requires peak download mobile speeds of at least 100mbps.
It said it would be able to re-use its network architecture, as well as upgrading its base stations, which would offer “significant capital savings”.
The company also emphasised its spectrum holdings as an advantage for its LTE service.
Clearwire CTO, John Saw, said: “Our extensive trial has clearly shown that our ‘LTE Advanced-ready’ network design, which leverages our deep spectrum with wide channels, can achieve far greater speeds and capacity than any other network that exists today.”
According to data presented by Clearwire to investors in February, Clearwire holds 46.3bn MHz-POPs of existing spectrum.
The telco with the next largest amount of spectrum was AT&T, which held 23.4bn MHz-POPs (or 30.1bn MHz-POPs if 700MHz spectrum is included).
According to the FCC, a MHz-POP is the product derived by multiplying the number of MHz (associated with a licence) with the number of people in the service area of the licence.
Clearwire also claimed to have a “significant competitive advantage” through the depth of its 2.5GHz spectrum. This is increasingly used as the main band for LTE services worldwide.
In the February document, Clearwire valued its spectrum at between US$23.2bn and US$46.3bn, assuming a value of US$0.50 to US$1 per MHz-POP.
However, Clearwire also said yesterday that it would be requiring additional financing to implement LTE technology.
According to a Reuters report, Clearwire’s CEO John Stanton said that the company will need between US$150m and US$300m until it can post positive cash flow in 2012.
Reuters also reported that Clearwire had said it needed an additional US$600m to upgrade its network.
Clearwire, in which US mobile operator Sprint Nextel holds a 54% stake, has been providing WiMAX services since 2009, but has struggled as the majority of its competitors have adopted LTE, the rival 4G technology.
Clearwire has admitted that Sprint currently accounts for “substantially all” of its wholesale subscriber base.
Yet last week, Sprint signed a 15-year agreement worth US$13.5bn with satellite/terrestrial venture LightSquared.
This will see LightSquared paying Sprint US$9bn, over an 11-year period, for spectrum hosting and network services.
Under the terms of the agreement, Sprint also has the option to use “4G LTE credits” (valued at US$4.5bn) with LightSquared. In effect, this would allow Sprint to acquire 4G LTE capacity on LightSquared’s network.
In its Q2 results, which were also released yesterday, Clearwire admitted that the growth of its wholesale subscriber base and revenues were subject to a number of risks and uncertainties.
Clearwire said that if and when LightSquared’s network is built, “it could result in Sprint eventually ceasing to resell our services, or greatly reducing the amount of our services that they resell”.
It added that pending consolidation in the US telecoms space, such as AT&T’s proposed US$39bn acquisition of T-Mobile USA, “may mean that there are fewer additional wholesale partners available for us to engage”.
However, LightSquared’s network has come under fire from GPS industry groups due to interference problems with GPS technology. LightSquared’s plans are currently being examined by the FCC.
Clearwire CTO John Saw said that “since we currently support millions of customers in the 2.5GHz band, we know that our LTE network won’t present harmful interference issues with GPS or other sensitive spectrum bands”.
The Q2 results showed a net loss of US$168m for Clearwire. This followed a net loss of almost US$227m in Q1.
The company is gaining subscribers. It ended the quarter with 7.65m total subscribers, up from the 6.15m reported in its Q1 report.
