Clearwire is feeling quite confident these days. The emerging WiMAX provider held an investor conference and outlined their plan for 4G domination. We’re “building the communications company of the future, today,” says Clearwire CEO Ben Wolf. Clearwire chief strategy officer Scott Richardson calls it “the second coming of the Internet.” It was quite the WiMAX pep rally. Clearwire executives say they intend to build a seamless nationwide 4G network way ahead of their competitors, namely Verizon and AT&T.
From a powerpointware perspective, the strategy looks real impressive. Clearwire intends to offer a five product suite of services which will include residential voice and broadband, mobile voice and broadband, and mobile entertainment. They intend to leverage their investor partners considerably, gaining access to tens of millions of existing subscriber relationships immediately. With their cable company partners, they intend to extend the cable entertainment experience “into the palms of consumer’s hands.” They intend to utilize Google’s Android platform for a suite of “compelling” mobile applications. Intel will contribute by powering millions of end user devices and do for WiMAX what it did for Wi-Fi, in effect bringing it to the mainstream. Wolf says that the average consumer’s total household spend on communications, ranging from $109-$258, is up for grabs, and they intend to capture as much of it as possible.
Clearwire says they’re off to a great start, achieving 13% penetration of residential broadband, and 3.5% penetration of residential voice service (utilizing VoIP). They now average $36.10 in ARPU with a 2% churn rate. They intend to take that to a 15% penetration with a dramatic increase in ARPU to over $60, across 200 million available pops by 2014. They say they will be the first company to launch mobile VoIP services.
From a competitive standpoint, Clearwire says they are leaps and bounds ahead of both 3G and 4G competitors. They say they will have at least a two year lead over LTE and their superior spectrum holdings (averaging 120 MHz per market) will provide a more robust network and end user experience than their competitors. Listening to Clearwire’s argument, Verizon and AT&T might as well pack it in and give up their 4G plans. An additional advantage, Clearwire contends, will come from the fact that their single network will provide both residential and mobile offerings, allowing subscribers to receive virtually all of their communications needs from a single provider. Sure AT&T and Verizon can do that too, but they need two separate networks to do it. Listening to this master plan, you wondered whether Wolf and his team were up on stage “pinching themselves.” It all sounded so wonderful. Of course powerpoint slides can do that for you. Make it look and sound wonderful. Executing that master plan will be a different story. Much of what they outlined is at least plausible. But it will in no way be easy. Managing the egos of the board of directors alone will be a challenge. But more importantly, executing that business plan in the hyper competitive world of wireless communications will be a feat to watch.