Clearwire: We're Ready for Primetime

WiMax trailblazer Clearwire LLC (Nasdaq: CLWR) reckons it can steal a march on wireless broadband rivals such as AT&T Inc. (NYSE: T) and Verizon Wireless by exploiting its spectrum advantage.

That's the message the company hammered home at an investor event in New York City this morning.

The Kirkland, Wash.-based operator has always been vocal about the large nationwide chunk of 2.5GHz broadband spectrum it will have when its deal with Sprint Nextel Corp. (NYSE: S) closes at the end of this year. (See Sprint, Clearwire Create $14.5B WiMax Giant, Can Clearwire Do It?, and Clearwire: We'll Kick LTE's Butt.)

Now, though, Clearwire is talking up the services it will able to offer by making the most of its bandwidth and even suggesting that the footprint could spread beyond North America.

Services get sexier
Clearwire will focus on "residential broadband, residential voice, mobile broadband and mobile voice" going forward, according to CEO Ben Wolff. "Once we close this [Sprint] deal, Clearwire's average spectrum position will be over 120MHz per market." Previously the company has been offering services in 30MHz to 33MHz of spectrum per market.

This will allow Clearwire to offer download speeds of "6 to 15 megabits per second per user," Wolff says. Once that level of spectrum horsepower is in place, the company will be able to offer services such as wireless high-definition TV (HDTV) and mobile gaming, as well as more standard services, such as unwired Internet capabilities, claims Clearwire.

Even though the company will "lead with data", according to chief strategy officer, Scott Richardson, it is still planning to offer more cellular-like services over time. “We are going to be the first operator in the U.S. to deliver mobile voice over IP,” he says.

Timing is everything
Although the company focused on its spectrum muscle and ability to deliver these new services over one network -- while using Sprint's existing CDMA deployments to provide services where it doesn't have WiMax -- the operator didn't offer much detail on exactly when it will make services such as mobile VOIP available to paying customers.

In fact, Wolff and his team mostly reiterated many of the broad targets that the company has already laid out for investors and the wider community.

Clearwire is expecting to cover 100 million U.S. citizens by the end of 2010, and reach 200 million potential users by 2015. The CEO once again said the company will only need $2 billion to $2.3 billion of additional capital -- on top of the $3.2 billion invested by Google (Nasdaq: GOOG), Intel Capital , and its cable pals -- to complete its planned mobile WiMax network. (See CLWR: Where It's at With WiMax and Clearwire: We'll Kick LTE's Butt.)

That is, if the firm even decides to take more than the standing $3.2 billion to build out the network. "It is a pretty robust business even if we don’t build out further," exclaimed Wolff during a very short question and answer session.

Assuming the operator does eventually build out the network so it can reach 200 million U.S. citizens, CFO John Butler said the firm should be able to achieve revenues of $17.5 billion by 2017 with an expected 30 million customers on its books.

Goin' Global
Clearwire's Wolff also stressed the increasing global footprint of 2.5GHz spectrum and hinted at possible Clearwire expansion outside of the U.S.

"We’ve got it in Canada, Mexico and throughout South America," Wolff said. He also noted forthcoming spectrum auctions in Europe that will open up bandwidth for so-called "4G" services.

Clearwire has always snapped up suitable global spectrum where it can. The company hasn't, however, really talked much about launches outside the U.S. since it launched in 2004. (See Clearwire Invests in Europe and Clearwire Expands in Europe.)

LTE Hatchet Job
As well as talking up its own bandwidth position, Clearwire went after its larger rivals hard at the event, claiming that AT&T and Verizon simply couldn't match it for spectrum.

"We believe the LTE operators will be hard-pressed to find the spectrum to build a nationwide broadband network," Clearwire CTO John Saw claimed at the event.

Nonetheless, the 700MHz spectrum that AT&T and Verizon bought at auction is generally considered better bandwidth for deploying mobile broadband, even if there is less of it. The theory goes that 700MHz spectrum will allow carriers to deploy fewer base stations than 2.5GHz because it allows longer range and better indoor coverage. (See AT&T & Verizon to Use 700 MHz for 4G .)

Who runs Clearwire?
The company was at pains this morning to stress that the new Clearwire will not be a joint venture but an independent company with an independent management team. "Sprint doesn’t control the company," stressed Wolff. "There are not too many cooks in the kitchen, as has been written in the popular press."

Once the Clearwire deal is closed, Sprint will own roughly 50 percent of the company, while existing Clearwire shareholders and the new investors will split the other half between them. "We expect to be able close the acquisition towards the end of this year," Wolff said.

— Dan Jones, Site Editor, Unstrung