Workshop Report: Clearwire on track with rollouts and app tools, but MSO partners struggle with Business Models
Disclaimer: Unlike many “would be journalists” that are either always negative on WiMAX, or are perennial Pollyannas that produce an endless stream of recycled “happy talk,” this author tries to be balanced and objective of WiMAX in general and the WiMAX events covered in particular. We have been covering WiMAX for over 6 years now, with more than 200 published articles on that technology. This author has no business relationships with Clearwire or any other WiMAX related company or entity. Please read on……
Clearwire briefed potential application developers at a well attended CLEAR Developer workshop in Santa Clara, CA on March 2, 2010. The key sessions were Upcoming 4G WiMAX APIs and Tools, The 4G WiMAX Business Opportunity for Developers, and the wrap up session revealing where Clearwire is now and where they’re going. You can find all the Sessions and speakers here.
We will skip the discussion of WiMAX APIs and Tools, which was already covered in detail at the Feb 10th IEEE ComSoc SCV meeting (you can access the slides at: http://www.ewh.ieee.org/r6/scv/comsoc/Talk_021010_CLEARDeveloperOverview.pdf).
Nonetheless, we noticed a lot of keen interest amongst developers who were accessing Clearwire’s Silicon Valley 4G Innovation Network using 4G USB sticks attached to their notebook PCs. It seems indoor coveraged worked fine in the Santa Clara Convention Center, where the workshop was held.
However, we were quite disappointed that neither Comcast or TW Cable had any new services to tell us about, despite the video content and managed networks they each own. More about this later in the article.
The Wholesale Opportunity
Clearwire (CLRW) was said to own more licensed spectrum in major cities than any other wireless network operator. Their “4G”+ network, known as CLEAR, is now covering more than 34 million points of presence (POPs) as of 4Q-2009. It’s also commercially available in 28 different U.S. cities including Seattle, Honolulu and Maui. CLRW plans to build out their mobile WiMAX network to reach 120 million POPs by end of 2010. They’ll have launched CLEAR service in most major U.S. cities by the end of the year including New York, San Francisco, Boston, Houston, Kansas City and Washington, DC. By this time next year, the CLEAR network will stretch from coast to coast and cover all the major U.S. cities.
In addition to selling “4G” fixed and mobile wireless broadband Internet access, Clearwire has MVNO (wholesale) agreeements with three of their large investors –Sprint, Comcast, TW Cable– who are reselling the service under their respective brand names. These partners were said to have a combined customer base of approximately 75M subscribers and their well known brand names would help the combined entities achieve a critical mass of customers much quicker than if only Clearwire was selling WiMAX services. Wholesale resellers will also drive WiMAX ecosystem development and investment, according to Randy Dunbar, Vice President, Wholesale Marketing & Strategy, Clearwire.
Mr. Dunbar told the audience that Clearwire will be signing up more MVNO resellers in the near future. These may include companies involved in: consumer electronics, retailers, CLECs, pre-paid/targeted market segments, smart grid and M2M (least understood by Clearwire, but with tremendous potential). The new resellers will help Mobile WiMAX deployment in diverse market segments such as: mobile consumer, home entertainment, power Internet user, SOHO, small business, large enterprise, vertical business’, road warriors (business travellers).
Currently, there is only one known hand held device available for CLEAR -the Samsung Modi. “4G” access is currently obtained using an external USB modem or “dongle,” embedded WiMAX in a PC, or a “personal” WiFi hotspot (many of which require an external USB dongle to access the WiMAX network). But Mr. Dunbar said that a “range of connected devices” are coming for CLEAR. These devices include: smart phones, STBs, DVR, mobile modems, MIDs, Consumer Electronics gadgets (such as portable media players). Randy hit my hot button when he stated that programmed video and time/place shifted video would be delivered via the 4G CLEAR network (see next section of this article).
+ IEEE 802.16e-2005 based Mobile WiMAX (being deployed by Clearwire and partners) is actually 3G according to the ITU-R; IEEE 802.16m will be the 4G version of mobile WiMAX, but Clearwire has not committed to that yet.
Cable (MSO) MVNOs reselling Clearwire’s mobile WiMAX network
Comcast, the largest MSO in the U.S., resells the CLEAR network as “Hi Speed to Go.” It’s branded mobile WiMAX service is available in Portland, Atlanta, Chicago, Philadelphia, Seattle/Bellingham area. Katie Graham, Director, Wireless Business Development said there were two ways mobile WiMAX could be purchased from Comcast:
- Fast pack: Cable Internet (home access) bundled with High Speed to Go
- Bolt on: 4G mobile WiMAX only or 3G/4G (using Sprint’s EVDO network for 3G)
A free WiFi router is included with a Hi Speed to Go subscription. More details on the Comcast mobile WiMAX service is at: http://www.comcast.com/highspeed2Go/#/highspeed2go
TW Cable has been completely spun off from Time Warner as a separate company (which means they don’t own any video content). Their CEO had recently stated that high speed Internet was replacing video as the firm’s core product. TW Cable currently serves 14.6M customers in 28 states. They claim to be the third largest broadband ISP in the U.S. with 9M subscribers. Brian Coughlin, Manager, Wireless Platforms for TW Cable told the audience that data oriented wireless products and services would be first priority for the company, with voice and mobile phones later. Brian stated that “Digtial media and service must be adaptable” and that an ecosystem would be required for this. I took this to mean that digital media and video services needed to be able to adapt to broadband access via mobile WiMAX, but I was wrong (see below for the reason).
The two MSO behemoths were asked by this author why they haven’t offered any premium video services or VoD over mobile WiMAX and they appeared to be stumped. Some of the explanations given were:
“The technology is ahead of the business models.” Clearwire
“The industry hasn’t figured out how to monetize the video applications.” TW Cable and Clearwire
“It’s definitely on our radar screen, but we don’t have anything we can announce at this time.” TW Cable
“Digital content rights are based on a given device, not on a service.” Comcast
We were preplexed by these statements. In particular, we do not understand why Comcast can offer On Demand Digital Video* over their managed network and cable Internet service, but not over mobile WiMAX.
* For details on Comcast On Demand On line service please visit:
Kittar Nagesh, Service Provider Marketing Manager at Cisco also participated in this panel. He made three statements I thought were very important:
- “Video will be 66% of mobile video traffic by 2013.”
- “The spectrum Clearwire owns is remarkably important. It’s important to make use of the spectrum (a wireless network operator) you have. It doesn’t matter if it’s used for WiMAX or LTE.”
- “M2M applications will be phenomenally important. It will be an inflection point (for the broadband wireless industry). Innovation will explode in an unbounded fashion.”
Shortly after this event, Cisco withdrew from the WiMAX RAN equipment market. They had been selling WiMAX base stations (from the Navini acquisitiion), but they now think there are better opportunities in the mobile packet core via their acquisition of Starent Networks).
Wrap Up Session: Clearwire now and in the near future
Dow Draper, Clearwire Vice President for Product Development and Innovation, told the audience that the average Clearwire customer is using 7G bytes of downloaded data per month — a number that Clearwire only expects to increase over time. That compares with an average 3G data card download of 1.4G bytes/month and an iPhone 3G average download of 200 M bytes/month.
Mr. Draper also said that the S.F. Bay Area can expect commercial WiMAX service by “late 2010,” and that “multiple smart phones” would be running on the Clearwire network before year’s end. Dow also hinted at other upcoming devices for CLEAR: MIDs, Portable Media Players (PMPs), tablets and embedded devices. He distinguished between category 1 devices which are tested and sold by Clearwire and category 2 devices which are sold through channels (and presumably retail stores).
“Clearwire will support multiple Operating Systems, especially Android,” said Mr. Draper. In summing up he said that thrid party developers, differentated devices, services, and applications are all critical in attracting customers for Clearwire and their MVNO resellers. While we completely agree with that statement, we think that the devices need to come to market very quickly (they’ve been promised for quite some time by Intel but haven’t materialized). But even more important are the differentiated services, such as video- either for entertainment, education, or surveillance.
Next Clearwire workshop:
4-G WiMAX Developers Symposium, Jun 15 10:00AM to 5:00PM Stanford University
- The latest on 4G WiMAX API’s and tools
- 4G WiMAX 101 basics for developers & network and device architects
- Market opportunities for 4G developers with symposium sponsors: Clear, Time Warner Cable, Sprint, Intel, Comcast, Cisco
- Business sessions from leading 4G industry executives
- 4G trends and forecasts
- Open discussion on the future of mobile internet innovation
Details at: http://scpd.stanford.edu/search/publicCourseSearchDetails.do?method=load&courseId=6650469