So, CLWR confirms that they will only have 2000 LTE-A towers operational by June 2013. This is a smaller number than the expectations they set prior to Softbank's involvement with S.
The stated use of the towers is to allow S to access the CLWR capacity in specific crowded markets. However, the S customers in those areas are not currently walking around with LTE-A enabled devices. There seems to be something missing. How do you get enough users to change phones in order to make use of the CLWR LTE-A towers????
One of the themes on this message boards has been -- If you build it, they will come. The problem with the CLWR build out plan is that it seems to be too small and too late. It also belies the claim that CLWR management made for years that all they needed to do was change a few line cards in order to be operational at the LTE-A level.
There seems to be something missing in the CLWR development plan - with or without S, or Softbank, or DISH. The CLWR towers exist. LTE-A handsets exist. But there does not seem to be a way to put them together in the same place or at the same time. We do not even know the top ten cities that CLWR will target for its initial build by June; that is only a few months away!
The light at the end of the tunnel is getting murkier rather than brighter.
Clearwire scaled down it's june deployment target in tandem with what sprint is ready to accomodate. When it was announced, it was made clear that the reduction in the june target would not impact clearwire's contract provision that pays them the bonus for meeting the target since the reduced target was attributable to sprint's timelines and not clearwire's. Clearwire is only building what can be deployed with volumes per sprint's timelines because that cap-ex has no ROI without a quick ramp-up of volumes... clearwire can't afford to have an LTE site sitting idle after absorbing cap-ex.
The merger remains an asset play. The timeline for the merger is so compressed that operational and income-statement issues will be more of a minor consideration. There are many ways that a buyout of clearwire could be consummated, but the most likely scenario, IMHO, is a bid by sprint that is modestly higher than the dish bid that is guaged to what would work with a network sharing agreement with dish, and a few minority shareholders who would sign onto it to ensure passage.
It is more complicated than you think. It will require a dual-mode smartphone that supports 800MHz, 1900 MHz, 2600 MHz, and if there is an intent to include Dish as a partner the smartphone will also have to support 2100 MHz.
What it comes down to is everything is in a “holding pattern” right now until the squabbles and mergers are finalized. Perhaps, this is a good indication that Dish may join the gang (SB, Sprint, Clearwire) so Clearwire’s build-outs will include AWS. The fact is towers and equipment will have to support multimode and multi-frequencies under LTE-A before any LTE-A smartphones are sold.
A major problem for DISH working to bring use to Clearwire's network is the timing: it will be two years or more before they would need the network. That problem becomes a potential time-bomb for DISH just as it has for Sprint-Clearwire in the past. They must time these expensive capital deployments to mesh-up with the ability to gain large numbers of subscribers. If Ergen gets that wrong he could significantly damage his overall business. Clearwire spun up $4 billion in high service cost debt and ongoing lease obligations which is now a major drain on value and business flexibility. While DISH has a viable current business and funding, that has limits to its power to carry them into the next generation of services. They must 'build to market'... that should not be difficult to understand.
I think the reason is that for at least the past six months everything is up in the air, everything is on hold until the new ownership is determined. CLWR is a zombie company right now. Sprint appointee Eric Prusch certainly gave a zombie-like performance on the conference call. This ain't a done deal and Softbank-Sprint people know it.
There's a good (old) article on the challenges smaller MVNOs could face if they opened up their wallets to CLWR for LTE. Maybe this is the real constraint with getting more LTE partners other than Sprint. Google "clearwire…a-little-lte-plastic-surgery-and-suddenly-the-belle-of-the-ball/" Still feel they could have adopted one city, one small region as a show-case like Google did with KC for it's fibre.
make no mistake about this....clwr is keeping pace with sprint and sprint's net vision projects here in my neck of the woods. clwr is changing out there samsung spi 2213 rrh bts units with nRRH V2 units....why isn't clwr and the media talking about this...? your guess is as good as mine...
Good points, Accugrowth. CLWR folks have released statements saying how easy it is for them to convert from WiMax to LTE and how they don't need to borrow any more. But the actions have not followed. It looks like they haven't tried to do anything other than actively fit within Sprint's vision for them. Which is to lay down, roll over and wait till Sprint is ready. If you don't even build out and show what you can do on a small scale, especially given all the global technology partnerships you tout and the devices and equipment available for a while now, why would anyone else show a willingness to partner with you on a large scale? Could it be a brazen attempt to downplay value or some real constraint that's not been well articulated? They certainly don't say much to investors.
Could have a lot to do with the buyout offers. Recall, CLWR can't cash Sprint's checks under DISH's buyout contingencies. That limits how much CLWR can spend if it wants to avoid a bk restructuring.
It's not DISH's buyout contingencies.. rather its Sprint's. Once Clearwire accepts payments for the new network deployments, then the spectrum is tied up and they are contractually tied up to serve out the agreement. However, some of this stalling is hardly stalling at all because Clearwire and everyone else are engaged in the FCC and DOJ proceedings which can determine the overall fate of the spectrum allocations as well as the SB-S deal upon which much of the funding depends. This can also be viewed as Clearwire not waiting because, as we discussed recently, the devices must ramp up into production and volume sales before the network has appeal outside of use in the dense corridors by modem users - which would be very unlikely to be an exciting market.
Ask some basic questions for the New Clearwire V2.0: "What direct and/or wholesale subscriber sales numbers are needed to become profitable?" You might consider several types of 'profitability', such as reaching cash-flow positive or also paying down and ability to refinance the huge debt at much lower interest rates. Whether the consideration is to become 'profitable enough' to get past the need of near-term outside financing or does the definition include retained profits needed to fund a new round of network deployments in a few years.
Clearwire BOD is holding for the sake of waiting for the process outside of their control to play out and, perhaps, to see if DISH might make their offer more concrete or just to wait while the needed approvals and transition of power of the parent company takes place and S-SB moves closer to needed to use the network... ie. they get devices starting into the market.
What will be the crunch time for Sprint's need for Clearwire's TD-LTE network? Sprint has rolled out coverage to around 60 million POPs with plans to reach about three times that by the end of this year. That will place them in the same league of LTE coverage, but still trailing behind Verizon and AT&T. Sprint must seed the market with devices that can run on the 2.6GHz TD-LTE network. That has not started yet... its expected that new iPhone, Samsung, HTC and other popular device models will be out in the first half... however, Sprint hasn't given out details. If this introduction follows what Sprint did with their own LTE network, they will start pushing the LTE models into the market even while they have only a few cities lit up with coverage. In any case, it looks to be toward the end of this year before there is a substantial need for Clearwire's network. While the new Sprint networks that make use of their own spectrum may be thin in bandwidth, so too will be the number of users. Its only into 2014 that Sprint will be likely to feel the pinch in capacity that Clearwire's network, via devices in folks hands, will be able to fulfill.
Sprint expects the Softbank acquisition approval by about the middle of this year. For now, what Clearlywired does is a mostly waiting for things to shape up. They are moving towards the conclusion that looks likely to be Sprint-SB acquiring them. DISH remains an outside chance due to the circumstances discussed previously. I give DISH no more than a 5% chance of acquiring Clearwire outright... even those odds seem generous. Again, there is a much better set of odds for some type of arrangement to be made either by the parties directly or orchestrated in some fashion by the FCC that would include CLWR, DISH, S-SB and maybe others.
Verizon, AT&T, DISH, Sprint, EBS spectrum holders, and others have come out of the shadows to stake their positions. That could move forward to a legitimate use of the spectrum by multiple parties. As outlined in the SEC 13e, the most prosperous way forward is for multiple operators to make real commitments and use of the network. However, that now looks convincingly locked up by Sprint until ruled or agreed to otherwise.
Murky only to those lacking vision.
Ever hear of SDR? Software Defined Radio. How about OTA? Over the Air (update).[This is How your firmware updates already arrive]
The majority of today's smartphones already contain chips (mostly QCOM) that support the rf band w/antenna, receivers & pa - the only difference is how to demod the signal. Slower (10Mbps) can be done in software. Higher 100Mbps is hardware. Either is MORE than adequate for a handset. Plus higher data rates eat more battery.
Nokia Lumia 920 get TD-LTE support via an OTA update.
We have covered recently how the Nokia Lumia 920 coming to India will not support their local variant of LTE, TD-LTE, making the device de facto a 3G phone.
Now according to Nokia support it seems the issue will not be a permanent black mark on the handset in the Indian subcontinent, with support claiming the device will be updated to 4G TD-LTE compliance via a Firmware Over The Air update.
LTE technology is usually divided into two distinct camps, FDD-LTE and TD-LTE, that might as well exist in two different worlds: own a device using one and you can't access the other. ZTE is bringing some harmony to 4G through the Grand Era LTE. The smartphone can connect to both LTE formats on China Mobile Hong Kong's newly dual-mode network, keeping locals in the high-speed zone no matter which 4G format is available. As our friends at Engadget Chinese discovered in a hands-on, however, it's not quite seamless at this stage. Subscribers have to reboot to switch networks, and the Hong Kong take on TD-LTE access doesn't upload as quickly as its FDD counterpart. Even with those bubbles burst, the Grand Era LTE is still a solid phone in its own right, touting a 4.5-inch 720p screen, a 1.5GHz dual-core processor and ZTE's relatively light Mifavor interface sitting on top of Android 4.0.
Sooooooo.... if a reboot is required to switch FDD / TDD networks I'd say we some SDR going on!!
$8+ NO LESS - Time to flip the switch and send us an OTA Upgrade!!
The biggest question for this business is what devices and services will users be able to buy, not what network is built. The devices, particularly the 'hot mobile phones' is what has and still remains missing. Because of the enormous cost and the fact that most subscribers stay with their current operator so long as they upgrade network within 2-3 years and offer comparable hot devices, this has meant that Clearwire is dependent on Sprint or other mobile operators to develop the customer base.
The only other way it might have been is if Clearlywired's service was so lop-sided in TVP, total value proposition, and/or disrupted the status-quo market paradigm. Apple did that with the iPhone: within a couple of years after introduction the industry no longer talked about 'the Walled Garden' device paradigm because Apple blew the walls down irreconcilably. The only way Clearlywired may have imploded the mobile-device business paradigm was to offer a service that was sufficiently bold: it would have needed to have broad enough coverage with fewer holes or holes that the user, you know, that fellow idiot that actually uses this wonderful stuff, could fill in the holes similar to how that works with WiFi. Its, you guessed it, how Softbank plans to build out 2.6GHz similar to how its proven to have worked in Japan and other advanced technology developer markets.
"If you build it, debts will come" .. that must be paid off and then some with a ground-swell of subscriber growth.
If you have only a one-tract mindset, brain-deadness will come.
"If you build it, they will come... that is, so long as your users can connect" should be the way its considered. This caveat depends on the 'other 65%-85% of mobile operators business model: while the up-front construction of networks is capital intensive, averaging $20-$30+ billion for a nationwide fully mobile network, that cost is only a fraction of total expenditures due to the pyramid structural relationship. The infrastructure sits near the bottom, just above R&D and pre-deployment development. Above that are services development, device, software, network and operations management, leases, etc. At the top layers are outlays for the tens of millions of device subsidies, sales and marketing, service and content delivery, etc.
"Connect the dots".. before jumping to conclusions: The concept that 'if you build it, they will come' has merit so long as basic link-ups are made. First, of course, 'what do you build' must be answered. Is what you are building able to deliver a market advantage, how much, for how long before competition counters it, and how will what you build today propel forward to the next and next generations of networks and devices? What is the 'total value proposition'? Are the strengths of the offering enough to gain marketshare and how locked in will it be as the network ages?
The most difficult thing about the premise of 'if you built it, they will come' is that the market is already highly saturated with wireless service that has become sufficiently evolving to require what you build able to counter what your competition will respond with 2-4 years afterward. That compresses the time frame a challenger has to gain marketshare, which was the situation for Clearwire: the purported 5 year window of opportunity evaporated in only about 3 years as HSPA/HSPA+ and LTE networks proliferated. Part of this problem is that the challenger must not just be as good as the competition but better in order to strip away customers. They must have strengths that overcome their deficiencies to such a degree that is overcomes prior preferences by being either much less expensive, much more of something like bandwidth, and/or complimentary. That last one is what 2.6GHz has primarily proven to be - more appealing when used with other networks than to replace them.
Indano chimes in with more techno-obliteration: Almost all base station are able to be upgraded within the same family of standards and to some degree between them using SDR. Whether that is OTA or over a fiber cable is irrelevant isn't it..why does anyone care about that? Some parts of the system may or may not be upgrade-able: some degree of upgrade may be possible for the RF, such as re-banding for nearby spectrum.
However, this ability to migrate equipment still does not come at zero cost: engineering, additional permitting, technicians for performing the upgrades and testing/tweaking performance, back-haul upgrades, etc. are often needed.
All that SDR stuff falls into the bucket of the 25% cost of operation of a mobile service business. And it becomes, so what, you put on your nerd hat and can convert the network.. then walk away and expect the market to knock on your door? How naive a little puck you are!