Clearwire looks for partners to replicate its US model in Europe

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Clearwire looks for partners to replicate its US model in Europe

By CAROLINE GABRIEL

Published: 9 July, 2008

READ MORE: Clearwire | US | Europe

The need for partners:

Clearwire CEO Ben Wolff said this week, in an interview with Unstrung, that he is already in talks about possible European alliances to help build out mobile WiMAX networks across large areas of the region. He would not elaborate on the potential partners, though there are some logical contenders, notably BSkyB, Rupert Murdoch's pan-European satellite TV organization, which has made no secret of its desire to add terrestrial wireless to its systems to support a quad play. Murdoch would bring the financial and commercial weight to acquire new spectrum - even, potentially, mobile broadband licenses in 2.5-2.69GHz, which will be auctioned in most countries over the next few years, and which would support Clearwire's ambitions more easily than the 3.5GHz band to which it has so far been confined in Europe. Clearwire US has its own partnerships with satellite providers, including the TV operator EchoStar and the mobile satellite operator ICO.

It could also look to replicate its US cableco partnerships, providing these operators with a wireless leg for their putative quad plays, and even dedicated spectrum. However, the European cable sector is less strong and more fragmented than that in the US, and such deals would be localized, rather than supporting the kind of international network that Murdoch could enable.

Other business models:

Failing a major quad play alliance, Clearwire could concentrate on a business model similar to the one it originally pursued in the US, prior to its on-off partnerships with Sprint Nextel. This focused on building out fairly gradually in target markets with high demand and relatively easy paths to profit, scaling out only as initial networks start to deliver a return. This approach would not make Clearwire a big name in European telecoms, but could deliver reliable cash flow and profits, especially with a focus on small to medium business services, which could in turn be welcome to the primary US operations. In this context, the company could adopt different partners and business models in each country where it holds spectrum, depending on the situation on competition and demand.

Partners could be fellow 3.5GHz licensees looking for scale, but perhaps providing existing customer bases and brands; localized wireline or business network providers; or even cellcos looking for additional capacity and fixed/mobile convergence systems in selected territories. The success of this more pragmatic, step-by-step strategy would depend on getting licenses in areas that would turn a healthy profit, rather than taking on the burden of wide area build-out or massive brand awareness and customer acquisition programs.

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