Image via CrunchBase
Late yesterday (Wednesday August 3) Om Malik at GigaOm wrote a post entitled "So What Happens to ClearWire's WiMax Network?" Well over a lovely pasta dinner tonight (see my Nosh of it on my page over on Google Voice founder Craig Walker's new venture Nosh.me) i got to chomp on Om's post as I read it on my iPad.
While Om talks about if, when and comes up with a very strong maybe, I'm willing to go out on a limb and deal with the why..and Intel's lock up period is only the tip of the iceberg.
Let's look at who else is involved in Clearwire and what happens when LTE comes along and who pays for it:
1. Sprint-they have committed to WiMax, and to be perfectly clear-Mobile WiMax. They in effect will inherit the Mobile Wimax technology and have Intel as a development partner. Sprint gets the Mobile WiMax network to replace what was the soon to be mothballed iDen network to do things with. They also have this deep relationship with the cable guys and have for years. It doesn't go away, it becomes the other network because it happens to work very well. It's just not built out yet and the cable guys are ready to sell it..
2. Comcast-they are already into WiFi as is fellow Clearwire investor Time-Warner. Bright House has dabbled with WiFi in parts of Florida so the concept of Wireless is not foriegn to the cable guys, but for the most part they all have been using Verizon and Sprint as partners. All of the cable guys are just waiting to be in mobile and Clearwire as an LTE player will provide them the opportunity. The mobile WiMax is simply the cream on top.
3. There's this little thing brewing called the AT&T-T-Mobile merger. That will create a need to toss off some territory and some spectrum. T-Mobile has this AWS spectrum in the 1700 Megahertz range but it's the bastard stepchild for wireless in North America. The cable guys are used to playing with what's left in general, and know how to make the leftovers become profitable. Between that and some other spectrum in the 800, 850 and 1900 megahertz range AT&T/T-Mobile will be forced to cast off make merger happen, meaning the locations for towers and cell cites (microcells, pico cells and even femto type cells) will be more than ready for a a take over of Clearwire.
4. The cable guys have the cash-and the longstanding Sprint relationship. The cash will fuel the expansion into LTE. Sprint will be the technology behind it, along with their outsourcing deal to Ericsson which just happens to make and build what? That's right LTE network hardware. So there the cable guys get vendor financing, and their partner for network and past mobile deals Sprint.
5. Google--The search giant has been looking for a play in mobile for years. But just like they don't want applications that get installed, they want to be the services for the mobile network and of course sell ads. Now add in the fact that they have devices called Android and can subsize handsets, services, etc. and then be the ad sales giant, they have multiple ways of to make money on this deal, and oh yes, did I also say, they have the cash.
So--what does this mean..well $660 million between Ericsson, Google, Time Warner, Comcast and BrightHouse is a rounding error at the end of the day, espcially if you amortize that over seven years.
In the case of Ericsson, they are also making money from what Verizon Wireless, AT&T and likely T-Mobile today through services, equipment or management of something or other. Plus many other operators around the world. Google via Android has Verizon Wireless, AT&T and T-Mobile selling their phones now.
Talk about a trojan horse strategy, they know and touch everyone of the other MNO's customers. It's called GMail and everyone using an Android has a GMail account, and many likely are getting Google Voice numbers. A long time ago someone wiser than me once shared with then Yahoo VP Brad Garlinghouse the fact that a Yahoo ID was more important than your phone number. Garlinghouse told me that was the one thing they never wanted to push and my sources said it was what scared the mobile operators the most. Well GMail + Google Voice better scare them because if you move your Google Voice number over to you mobile operator which Sprint now does....get the picture.
Oh-and where exactly did Google choose to build their first fiber network? Kansas City, where Sprint is based.
Google + Sprint + The cable companies vs. the Mobile Operators.
Doesn't it get Clear now?