Clearwire Makes Jacksonville A Broadband Test Case With this month's
RELATED SYMBOLS: (BLS)
Jan 14, 2003 (Broadband Business Report/PBI Media via COMTEX) -- based
Clearwire Technologies, all eyes are on Jacksonville, Fla. With the Clearwire
launch, Jacksonville becomes home to the largest commercial wireless broadband
network of its kind. Using Instructional Fixed Television Service (IFTS)
spectrum leased from non-profit agencies and Universal Mobile
Telecommunications, Time Division Duplex (UMTS-TDD) equipment from IPWireless
Inc., Clearwire is looking for a market that can prove its business case, and
it's specifically looking to take on DSL and cable modem service head to head.
Indeed, Clearwire execs seem almost breezily unconcerned with the competitive
threat from cable and DSL. Clearwire's service uses a portable broadband modem
that plugs directly into a computer or router. It can be carried along with a
laptop and set up anywhere, making the service portable. In addition, the
cellular structure of the 3G network can reach customers who can't get DSL or
cable service. According to Senior VP of Marketing, Jeff Mucci, the company
plugged 500 area businesses into BellSouth's [BLS] DSL pre-qualification tool
and estimated that 50 percent of Jacksonville businesses can't get DSL. The
company also estimates that 20 percent of residential customers have no
broadband access at all. In fact, while other carriers deploying IPWireless
equipment have proven that it's possible to undercut existing broadband on
price, Clearwire's prices show that they're not doing that. Instead Clearwire
thinks it can compete with cable and DSL on availability and features like
portability.
So why Jacksonville? According to Mucci, it was the best market to prove
Clearwire's business model. That model involves spectrum from the non-profit
Hispanic Instructional Television Network (HITN). An equity deal with HITN made
Clearwire one of the big three holders of 2.5 Ghz spectrum alongside Sprint
[FON] and WorldCom [WCOM] who got theirs from bankrupt wireless cable companies.
The company emphasizes second and third tier markets, and focuses on business
customers with residential service more of an added revenue opportunity. Mucci
says Jacksonville beat out other markets on the shortlist because the density of
its business district let them reach a bigger chunk of their target customers
with less investment (the network is launching with only four cell sites, though
another four to five are planned), and because its robust broadband market
offered the best chance to "demonstrate our ability to compete with DSL and
cable." Despite an eagerness to take on the phone and cable giants, Clearwire
isn't itching for a fight with Sprint and WorldCom, explaining the focus on
second and third tier markets. But mainly, Jacksonville was chosen for its
potential to impress investors and help fund future buildout. Mucci says he
expects Clearwire to be able to start tapping capital markets by the middle of
this year, and to begin expanding into other markets by the end of the year.
IPWireless is also hoping Jacksonville will become a building block. The company
has smaller customers up and running in Maui and in Missoula, Montana, and a new
deal with Walker Wireless that will cover all of New Zealand.
But Senior Director of Marketing Jon Hambidge knows it will take a large scale
success to bag the major cellular operators that are its most-wanted customers.
According to Hambidge, the technology was designed to their demands after seeing
the problems of first generation fixed wireless. "Plug and play, able to go
through walls, cheap modems, the business case has to work, and ideally we'd
like it to have some portability," he explains.
But despite trials and interest overseas from major wireless operators, nobody's
been willing to take the plunge so far. "I think everyone in the industry is
anxiously watching what Clearwire's doing," Hambidge says. And obviously,
Clearwire isn't the only company with something to prove in Jacksonville.
>>Jeff Mucci, Clearwire, 469/737-7405; Jon Hambidge, IPWireless, 650/616- 4062<<
Clearwire's Plans and Pricing*
Plan (users) Speed (up/down) Cost
Residential (1) 64k/ 512k $49.00
SOHO (1-3) 128k/768k $79.00
Basic Business (3-5) 256k/1M $149.00
Business Premium (up to 10) 512k/1.5 M $199.00
Business Deluxe (up to 25) 768k/1.5M $239.00
* based on 1-year agreement
Source: Clearwire
[Copyright 2003 PBI Media, LLC. All rights reserved.]
Broadband Business Report, Vol. 13, No. 1 [Copyright 2003 PBI Media, LLC. All
rights reserved.]
Copyright 2003 PBI Media, LLC. All rights reserved.
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(Wall Street)
Daniel Nieves
