Setback for WiMAX in the US

Ina Sebastian | November 09, 2007, 11:53 AM

Sprint and Clearwire have just announced that they have not come to an agreement regarding a partnership for the build out and operation of a national WiMAX network.

Sprint noted that, while committed to developing WiMAX services, it would review the strategy and comment in early 2008. The final decision is likely also dependent on the priorities of the new CEO. A new innovate WiMAX service and national infrastructure is a long-term strategy, which requires a large ecosystem of devices and applications, as well as innovative pricing and service offerings. Demand for such a service is not that certain, in particular with a variety of alternative wireless technologies in the US.

Clearwire saw a significant negative impact on its shares as a result of the announcement. While it is certainly a setback for the company, I think that their business model is still promising – however for a niche market. We see demand for wireless broadband services outside of the major metro areas, in particular in more rural places with a lack of wired broadband. Clearwire’s transition to mobile WiMAX equipment is another incentive beyond residential gateways, as it offers portability on top of home broadband.