Deal for a National WiMAX Network Announced

Ina Sebastian | May 07, 2008, 01:45 PM

Sprint, Clearwire, and additional investors (Intel, Google, Comcast, Time Warner, Bright House Networks) have reached an agreement regarding a national WiMAX build out through a new company named Clearwire. My colleague Julie Ask wrote a very insightful blog on the motivations of the investors yesterday. As she implied, success of the network and potential services is not clear. The business model will require a lot of thought, multiple revenue streams, and potential tiered access including advertisement. Our new consumer survey shows that more than half of online users are interested in connecting to the wireless Internet outside of the home. There is also interest in connecting devices other than laptops – such as cell phones, cameras, media players gaming devices – however, interest in connecting laptops is highest at this point. This demand is well served by Wi-Fi, which focuses on indoor locations, for which laptops are best suited. Providers have to create demand for mobile Internet access from smaller portable devices. This includes improving the browsing experience, which is still fairly painful. Another issue is the lack of willingness to pay for high-speed access outside of the home. Not that many public Wi-Fi users are willing to pay for services. Even frequent business travelers use free Wi-Fi when available. Wide availability of free Wi-Fi is one of the reasons for this, and it will also compete with fee-based WiMAX (in particular considering the increasing ubiquity of Wi-Fi in portable devices). Even fewer people are willing to pay for 3G access from laptops. Clients should contact us to discuss our consumer data on demand for wireless broadband and devices, as well as upcoming research on WiMAX and the impact of open access on carrier business models.