Clearwire and Sprint Complete Deal: Now How Long Until 4G Mobile Broadband?

| Dec 3, 2008 | Digital Home - U.S. | Competitive Intelligence Reports

| Analysts: Larry Hettick, Bill Ho

Current Perspective: Neutral/Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

December 1, 2008 - Clearwire announced today that it has completed the transaction with Sprint Nextel under terms originally disclosed on May 7, 2008 to combine their next-generation wireless Internet businesses. The new company retains the Clearwire name and expects to build a nationwide WiMAX 4G mobile broadband network. Clearwire has received a $3.2 billion investment from Comcast, Intel, Time Warner Cable, Google and Bright House Networks.

Analytical Summary

• Current Perspective: Slightly positive on Clearwire’s now complete transaction with Sprint to build out a WiMAX 4G wireless broadband network. because it gives both the new Clearwire and its cable-company investors momentum with an 18-24 month advantage over AT&T, Verizon and T-Mobile to deliver high speed mobile data services. These other wireless providers must wait on long term evolution (LTE) wireless technology production ready gear since only lab trials are on-going in 2008 and in 2009.

• Vendor Importance: High to Clearwire, because the company has secured regulatory and shareholder approval for the necessary funding and spectrum to deliver a nationwide 4G mobile broadband service in a partnership with Tier 1 cable operators and other investors including Google and Intel.

• Market Impact: High on the digital home market in the intermediate term, because if Clearwire deploys as planned the move puts Comcast, Time Warner Cable and Brighthouse 18 to 24 months ahead of AT&T and Verizon with a mobile broadband offering that can deliver multiple Mbps of broadband capacity speeds for mobile data and video applications. The consortium is laying the foundation for the cable companies and Internet service companies like Google to offer applications and content that need high speed connections to give a satisfactory user experience for mobile data and video services. Also the partnership is creating a differentiator by potentially offering speeds and devices that perform equally well inside and outside the home.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Digital Home - U.S. | More information

Recommended Competitor Actions

• T-Mobile must continue to have a very aggressive 3G rollout schedule to catch up to the national rivals. Although the carrier remains focused on execution, it has yet to declare its 4G (presumably LTE) intent and how it will get there. As Clear services, Sprint 4G, and even cable provider 4G services rollout, T-Mobile may feel technical roadmap pressures; it will also be behind any upcoming LTE deployments by Verizon Wireless and AT&T.

• AT&T needs to ensure that the HSPA+ version of its network technology will be made available in 2009/2010 to offset any twofold or threefold throughput claims by Clearwire, Sprint or cable providers. While AT&T believes that HSPA+ provides a long runway before needing to deploy LTE-based services, it also needs to monitor Verizon Wireless’ LTE progress closely.

• Verizon Wireless needs to meet or beat its LTE expectations. Although Verizon contends its LTE infrastructure may potentially offer faster broadband speeds than AT&T's, Verizon’s 24-month horizon for mass market deployment may put it at a disadvantage in competing for mobile broadband or mobile video services.

• In the long-term, Cox should look ahead and consider forging 4G LTE roaming agreements with AT&T and Verizon Wireless to deliver service seamlessly outside of the user’s home area. Without roaming outside the Cox LTE local footprint, the service’s success will be quite limited. Interoperability with the Clearwire network is not an option.

Recommended End User / Customer Actions

• Unless consumers like to be on the “bleeding edge” of technology (or unless they have no other broadband connections choices), they should approach WiMAX with caution until Clearwire proves it can support the speeds advertised across a wide geography. Roaming will be an issue, given the limited availability of the WiMAx network.

• Consumers looking for more than mobile Internet access will need to wait until mobile video or 4G multi-mode devices are manufactured to support voice. In the meantime, customers will have only PC access through a WiMAX modem or auxiliary PC card to access the Clearwire network.

• Since Clearwire offers wholesale opportunities for a 4G service, other mobile operators who are considering an MVNO arrangement with Clearwire need to carefully understand deployment models for mobile WiMAX. Most deployments will not be fully mobile as many will use WiMAX as a data overlay to existing 2G/3G networks. Consequently, the ecosystem is affected by the need for devices that support both types of networks. As LTE will likely use the same overlay techniques, operators should weigh the option of going with mobile WiMAX now or waiting for LTE.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Digital Home - U.S. | More information
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