Clearwire breathes new life into retail business

Clearwire has been widely expected to dump its own-branded retail business, on which it has defocused on the past two years, and adopt a wholesale-only model for its upcoming LTE network. However, at last week's CTIA Wireless event, the operator said it would stay in the retail sector for the foreseeable future.

In its first quarter, fewer than 10% of net new subscribers on Clearwire's existing WiMAX network were for its own-branded services, while 537,000 of a total of 586,000 were wholesale users. Most of those come from the 'Sprint 4G' WiMAX/CDMA offering, especially since Clearwire's other main MVNO/investors, three cablecos, recently defected to a new Verizon partnership.

The operator is going through a significant transition in its business as it migrates from WiMAX to LTE in key markets, with the new network rolling out during 2013. Also, Sprint has stopped launching new WiMAX devices and will focus its 4G efforts on its own LTE network from the second half of this year, although Clearwire remains part of its mobile broadband picture in future. However, there is a risky period of a year or more when Clearwire does not yet have LTE and Sprint will have sufficient LTE capacity of its own, so the need for other MVNOs and even a retail business is clear, to sustain usage of the WiMAX network and boost confidence in the migration strategy.

As of the end of the first quarter, Clearwire had 11m subscribers, of which 1.3m were retail and 9.7m wholesale, mainly Sprint subscribers. During 2011, the firm had stopped actively promoting its own 'Clear' offering, officially to cut costs but also, reportedly, under pressure from Sprint, which perceived conflicts of interest with its own proposition. It killed off its prepaid Rover brand and refocused Clear on pay-as-you-go. But now, thanks to a funding deal with Sprint, Clearwire says it has more resources to revive Clear. "The retail business is alive and well," the firm's general manager of retail, Dow Draper, told a press conference at CTIA.

He said Clearwire has revamped all its offerings recently and seen "phenomenal" uptake by dealers, as well as mounting a radio and TV advertising campaign in February. The operator offers prepaid daily, weekly and monthly passes and two different speeds - $50 a month for full soeed and $35 for 1.5Mbps. Draper said only those customers on the monthly plans are counted in the quarterly subscriber reports, and the vast majority have the $50 plan. This is geared to home and portable use, not to competing with the big cellcos' smartphone 4G offerings - there are no plans to offer a WiMAX smartphone. Currently, Clearwire offers a dongle, mobile hotspot and home modem.

No official decision has yet been made on whether to include LTE in the Clear offering, or whether to launch a smartphone. This is likely to depend partly on the attitudes and level of commitment from LTE wholesale partners, not just Sprint but newer additions like Leap Wireless. "When it makes sense to add LTE to the retail mix, we'll do that," Draper said.

According to Clearwire's CTO John Saw, when that LTE network goes live it will outpace other US services, supporting peak download speeds of 168Mbps because of the high capacity in its 2.5GHz spectrum. This will enable the operator to use LTE-Advanced carrier aggregation to achieve 40MHz channels, twice the size of the largest at Verizon and AT&T.