Gee, that is not going to make "shorts" very happy.
On the hourlong call, Hesse provided updates about key initiatives at Overland Park-based Sprint (NYSE: S), many of which play into those long-term prospects.
Hesse reiterated Sprint’s commitment to Clearwire Corp. (Nasdaq: CLWR) in rolling out faster 4G wireless service nationwide, calling that the next wave of Sprint’s capital expenditures.
The potential and popularity of data functions on mobile phones mean the “industry’s best days are still ahead,” he said.
Should Clearwire look internally for more cash to back the costly rollout, Hesse said, Sprint — 51 percent owner of Clearwire — would fork over its fair share.
Sprint offers 4G service in 17 markets now, a number expected to pass 25 by the end of the year — covering 30 million people — and reach 80 by the end of 2010, covering 120 million people.
Five years from now consumers will still want to make mobile phone calls and they'll still want data. And they'll still prefer to manage and carry one device to do it with.
There is nothing in the evidence of consumer behavior to suggest this will preference will change.
But consumers aren't making their wireless purchasing decisions on the lowest cost per bit, they are buying for the total experience deliverd by their device and the service.
Today that is unquestionably single handset converged voice and data 3G smartphones.
And that underscores just one of the many differences between Wal-Mart and CLWR. Wal-Mart sells what people want to buy, CLWR just sells cheap bits.
The Wal-Mart analogy is hardly accurate. Wal-Mart is everywhere throughout the U.S. and reaches both urban and rural customers and it provides consumers with necessities they need to live.
NEW CLWR provides an alternative broadband pipe to markets where broadband largely already exists. Its typically slower and less reliable than wired solutions in the same market so the primary value is as a data-centric mobility service, and consumers already have that experience with their 3G enabled smartphones and laptops.
Oh yes, and Wal-Mart makes a lot of money doing what they do.
Clearwire is a long-term play: As the network is being built out today, that is given the extent of services and devices being offered, Clearwire only partly fulfills a package that looks 'sexy'.. that will compete with 3G services.
To begin with, Clearwire, as a stand-alone service, is not the same thing as mobile service:
> It does not have near the extent of coverage
> Clearwire is 'metro cloud' type service: metro areas it covers do not penetrate as deeply into suburban nooks and crannies or into buildings.
> The devices will not be much different than 3.5G devices. For now, Clearwire is the trend follower in devices: for the most part devices developed for 3G networks or as notebooks/netbooks are adopted to use WiMAX - not exclusively developed for Clearwire. USB dongles/cards are, of course, made to a standard form-factor that is common with 3G and Wi-Fi and other peripherals.
Clearwire will distinguish itself as cable companies roll out mobile TV, more devices become available that make the increased bandwidth really rock... as there is a more abundant difference between Clear WiMAX and other offerings.
The difference is there if you look hard enough.. but the average idiot is not going to look hard - the package has to knock them over their heads for it to become a market driver on par with the leading products and services. However, there are varying degrees of success: they might not knock the public's socks off entirely. Instead, like most things people buy, Clearwire can build a set of offerings that provide good value for the money or are tailored to specific sets of subscribers. There is nothing wrong at all with being the 'WalMart of Wireless' - WalMart has kicked a lot of butt.
Since Wimax is first to bat, subscribers will become accustomed to this format. Much like Apple has the dominant smart phone, wimax has a chance to be the leading 4G. As users see the advantages to 4G/Wimax on othe mobile internet devices they will demand it on phones. I made a couple trades on my blackberry the other day and the 3G speed cost me a few pennies in delays. I've only had the smartphone a few months and im already tired of waiting for downloads. I hope in the upcomming earnings they announce a more agressive roll out plan. International expansion is starting from the news feeds.