Wireless

German phone giant Deutsche Telekom is looking to jump into the 4G wireless market in the U.S. through partnerships with U.S.-based service providers, according to a report by Bloomberg News.

Bloomberg reported Tuesday that Deutsche Telekom is looking to beef up its presence in the U.S. wireless market by investing in Clearwire, a company that is building a 4G wireless network using a technology called WiMax. Sources also told Bloomberg that Deutsche Telekom is also talking to Metro PCS, which recently acquired spectrum to build its 4G wireless network.

Deutsche Telekom already owns T-Mobile USA, the fourth-largest wireless carrier in the U.S. But the carrier's growth has remained flat for several quarters. And the company hasn't yet announced plans for its next-generation network.

Last week, rumors resurfaced that Deutsche Telekom was looking to buy Sprint Nextel. Sprint is the third-largest wireless operator in the U.S. and has been struggling the last few years to retain customers. The idea behind a potential buyout of Sprint is that it would give Deutsche Telekom more subscribers, which could help it compete more aggressively against the two largest wireless carriers in the U.S., AT&T and Verizon Wireless.

But now it looks like the German telecom giant could be looking for a more cost-effective way to increase its presence in the U.S. market.

Partnerships with Clearwire and MetroPCS would cost the German phone company much less than purchasing Sprint outright, and it would be a lot easier than trying to digest another wireless provider.

Buying Sprint Nextel would likely become an integration nightmare for Deutsche Telekom. Sprint Nextel is already the product of what many consider one of the worst telecom mergers ever. Sprint bought Nextel in 2005 for $35 billion. And for the past four years, the company has struggled to integrate two different wireless networks. Sprint's network operates using a technology called CDMA, while Nextel uses a technology called I-DEN. T-Mobile USA uses GSM, which would introduce a third type of technology into the mix.

But if 4G access is what Deutsche Telekom really wants, then a partnership with Clearwire makes sense. Sprint owns about 51 percent in Clearwire. Last year, the companies created a joint venture combining assets from both companies. Clearwire, which has already begun building its nationwide 4G wireless network, is using 2.5 GHz spectrum that is owned by Sprint.

Clearwire said in August that it would spend between $1.5 billion to $1.9 billion in 2009 to expand its network. Deutsche Telekom could provide more funding for this endeavor in exchange for access to the network, Bloomberg reports.

Clearwire has already made similar deals with other investors. Last year, cable companies Comcast and Time Warner Cable were among investors that provided the company with $3.2 billion in funding. Google and Intel have also invested in Clearwire.

As the Clearwire network comes online, Comcast and Time Warner Cable have each announced they will offer mobile wireless broadband service using the Clearwire network in areas where they offer cable service.

A deal with MetroPCS, which sells prepaid wireless service, could help Deutsche Telekom get access to a 4G wireless network that will use a more widely adopted technology called LTE or Long-Term Evolution. MetroPCS acquired spectrum in the 700 MHz wireless auction, and it has said that it plans to build a 4G network using LTE starting in 2010. Verizon Wireless, the nation's largest mobile operator, which also acquired spectrum in the same 700 MHz auction, is also building a 4G wireless network using LTE.

Clearwire Communications has created a sandbox more than 20 square miles in size where developers can play with WiMax.

Clearwire announced on Tuesday the launch of the largest test area yet for its 4G WiMax service in Silicon Valley. Covering a wide area from Santa Clara to Mountain View to parts of Palo Alto, the company's Clear 4G WiMAX Innovation Network will let developers test the mobile broadband network on a large scale.

First announced in April by Clearwire, the Clear 4G WiMAX Innovation Network is seen as a testbed to prepare for the launch of commercial WiMax service in the San Francisco Bay area next year.

The 20-square-mile service will hit the campuses of Intel and Google, two investors of Clearwire's 4G WiMax network who've already begun their own own internal 4G testing. Cisco Systems, which will provide equipment to Clearwire, will get coverage in a few months as the network grows.

To play in the new WiMax sandbox, developers must register with Clearwire's development program and describe the WiMax ideas they'd like to pursue. Developers would also need to buy a Clearwire WiMAX USB modem for $49.99. Clearwire says it will provide the service for free to a limited number of qualified developers prior to the commercial launch.

Clearwater will also join and help sponsor the Sprint Open Developer Conference running October 26 to 28 in Santa Clara. The company encourages developers working with Clear 4G WiMax to attend the conference to learn more about the service.

Clearwire touts its Clear 4G WiMax service as offering peak download speeds of up to 10 Mbps, with an average of 3 Mpbs to 6 Mbps. As a comparison, the company says that today's 3G networks can only reach speeds of about 600 kbps to 1.4 Mbps.

WiMax has faced tough competition from LTE for the battle to become the wireless 4G standard. Backed by AT&T and Verizon Wireless, LTE is sometimes forecast as the ultimate victor with potentially the more dominant share of the market. But WiMax is also expected to grow as deployments ramp up.

This was originally posted at ZDNet's Between the Lines.

Clearwire said Tuesday that it expects fourth-quarter net subscriber additions to ramp as it rolls out its 4G WiMax service into more markets. That tipping point will be critical to the company's success--and possibly its survival.

On a conference call with analysts, Clearwire CEO Bill Morrow said that he was pleased with WiMax uptake in new markets such as Las Vegas. Morrow added that "fourth-quarter net subscriber additions will be higher than all 2009 quarters combined."

That's good since Clearwire projected a cash burn of $1.5 billion to $1.9 billion for 2009. So far the company has burned through $646 million (statement). Clearwire had $2.5 billion in cash as of June 30. If the fourth-quarter 4G customers don't roll in, Clearwire may be cutting it close with its cash burn. Morrow and CFO David Sach cited Clearwire's strong balance sheet, but Moody's has it on its "bottom rung" list of companies with weak liquidity.

Clearwire rolled out its Atlanta WiMax service in June and followed up with Las Vegas in July. The company plans to cover 30 million people by the end of 2009 as it launches 4G WiMax services in markets ranging from Philadelphia to Seattle to Maui and Honolulu to various locales in Texas. Clearwire--along with partners Sprint, Comcast, Time Warner Cable, and Google--is betting on WiMax for 4G service while other much larger rivals such as AT&T and Verizon are betting on Long Term Evolution (LTE) networks.

Clearwire is planning to emerge as a 4G service wholesaler with big partners being the key distribution channel.

For now, Clearwire's results show the company is in a waiting game. It's a small wireless provider, facing high churn rates (some related to moves to 4G), and the plan is to leverage the distribution heft of partners such as Sprint.

The company reported a second-quarter net loss of $73.4 million, or 38 cents a share, on revenue of $63.6 million, up 9 percent from a year ago. Wall Street was expecting a loss of 39 cents a share on revenue of $65.2 million. Clearwire shares slid in afterhours trading.

Clearwire executives said the company will be aggressively hiring workers as it rolls out services. Capital spending will also increase in the second half of 2009. The company has big suppliers such as Cisco, Huawei, Motorola, Samsung, and Ciena that can enable Clearwire to cut equipment costs.

By the numbers:

• Clearwire added 12,000 net subscribers in the second quarter for a total base of 511,000, up from 461,000 a year ago.

• Average revenue per unit was $39.47 on par with a year ago.

• The second churn rate was 2.8 percent, up from 2.6 percent a year ago. Clearwire expects churn to continue to trend higher.

• Clearwire has 23.1 million points of presence, up from 16.8 million a year ago.

Clearwire, which is using Sprint Nextel's 2.5GHz spectrum to build a nationwide 4G wireless network, announced Monday 10 more markets that will get the company's Clear WiMax wireless broadband services starting September 1.

Eight of the newly announced cities are in Texas: Abilene, Amarillo, Corpus Christi, Lubbock, Midland/Odessa, Killeen/Temple, Waco, and Wichita Falls. The other two markets are Boise, Idaho, and Bellingham, Wash.

These 10 markets will join four other officially launched WiMax markets: Atlanta, Baltimore, Las Vegas, and Portland, Ore.

Some of the additional markets planned to launch in 2009 include Chicago, Charlotte, N.C., Dallas/Ft. Worth, Honolulu, Philadelphia, and Seattle.

Clearwire says it's on track to launch 80 markets by the end of 2010. In 2010, it plans to roll out service in New York, Boston, Washington, D.C., Houston, and the San Francisco Bay Area among others.

It's important for Clearwire to launch more markets, especially in major cities where its joint venture partners can also resell the service. Comcast, Time Warner Cable, and Bright House Networks have each invested in Clearwire, along with Google and Intel. Altogether the companies pitched in $3.2 billion. Comcast and Time Warner Cable have already announced plans to start reselling the WiMax service in areas where they offer cable service. These cable companies plan to bundle the 4G wireless broadband service with their existing high-speed broadband services.

Sprint Nextel, another major Clearwire partner, is also reselling the service combined with its 3G wireless service in some markets, such as Baltimore.

Clearwire uses a technology called WiMax, which offers faster speeds than current 3G wireless technologies, but offers wider coverage than other high-speed wireless technologies such as Wi-Fi. Clearwire claims that it can provide up to 4 megabits per second for downloads and 500 kilobits per second for uploading, which is more than double what consumers can expect using a 3G wireless connection.

The Clear WiMax service from Clearwire starts at $20 per month for in-home wireless broadband. And its mobile Internet plans start at $40 per month. Customers can also get a day pass for $10. The company also allows customers to add voice service to their in-home package for $25 per month.

Time Warner Cable will soon be offering a 4G wireless broadband service using Clearwire's WiMax network.

CEO Glenn Britt told investors during Time Warner Cable's second-quarter earnings call on Wednesday that the company will begin reselling wireless service through Clearwire starting this fall in Dallas and Charlotte, N.C.

Clearwire uses a technology called WiMax, which offers faster speeds than current 3G wireless technologies, but offers wider coverage than other high-speed wireless technologies such as Wi-Fi. Clearwire claims that it can provide up to 4 megabits per second for downloads and 500 kilobits per second for uploading, which is more than double what consumers can expect using a 3G wireless connection.

Britt didn't disclose product offerings or pricing, but he said that investors will hear more details about the new service later. But it's likely that Time Warner will bundle the 4G wireless service into its cable modem broadband services.

"We see wireless as complementing wireline," he said.

Time Warner Cable invested in Clearwire in 2008 joining fellow cable company Comcast, as well as tech giants, Google and Intel. The companies contributed a total of $3.2 billion to the new company. Sprint Nextel also invested in the new Clearwire and is allowing it to use its 2.5 GHz wireless spectrum to build the nationwide network.

Clearwire's service is up and running in a few cities, including Atlanta, Baltimore, Las Vegas, and Portland, Ore. And the company has plans to roll it out in more markets this year and into 2010.

Comcast has already begun reselling the Clearwire WiMax service, which it calls High-Speed 2go, in Portland and Atlanta. Comcast is offering the service at the promotional price of $49.99 per month for a year.

Sprint Nextel is also reselling the Clearwire WiMax service in certain markets, such as Baltimore. The Sprint service offers laptop users the option of using the 4G WiMax network where it's available and Sprint's 3G wireless network where it's not available.

Clearwire also sells service in every market where it's launched. The service called Clear starts at $20 per month for in-home wireless broadband. And its mobile Internet plans start at $40 per month. Customers can also get a day pass for $10. The company also allows customers to add voice service to their in-home package for $25 per month.

Comcast is getting into the wireless broadband business by bundling Clearwire's 4G wireless service with its existing broadband products.

The largest cable operator in the U.S. will launch the new service in Portland, Ore. And it will expand the service to other Comcast cities later in the year, including Atlanta, Chicago, and Philadelphia.

(Credit: Comcast)

Comcast invested in the new Clearwire in 2008, along with Google, Intel, Time Warner Cable, and Sprint Nextel, which gave Clearwire its 2.5GHz spectrum. Clearwire's plan has been to roll out its service nationwide. The service is now up and running in a few cities, including Atlanta, Baltimore, and Portland, Ore. And the company has plans to roll it out to 80 markets by the end of the year.

Some of the cities where it plans to launch the service include, Las Vegas, Chicago, Charlotte, N.C., Dallas/Ft. Worth, Honolulu, Philadelphia, and Seattle. And it plans to launch the network in cities such as New York, Boston, Washington, D.C., Houston, and the San Francisco Bay Area, in 2010.

Clearwire is using a technology called WiMax, which offers faster speeds than current 3G wireless technologies, but offers wider coverage than other high-speed wireless technologies such as Wi-Fi. Clearwire claims that it can provide up to 4Mbps for downloads and 500 kbps for uploading, which is more than double what consumers can expect using a 3G wireless connection.

Comcast will be selling 4G wireless access as part of an Internet bundle to Comcast subscribers. To entice new subscribers, Comcast is offering the new 4G wireless with its 12 Mbps download cable modem service, plus a free 802.11g router for $50 a month for the first 12 months.

The data card used for the 4G wireless, which fits into a laptop, costs $99. But subscribers who sign up for the package with a two-year commitment get the data card for free.

After the first 12 months, subscribers will then pay $43 per month for the 12 Mbps broadband service and $30 extra per month for 4G wireless service. The 4G wireless service is only available in Comcast's cable territory, but subscribers who travel to other cities where Clearwire's network is operational will be able to access the network at no additional cost.

New customers signing up for Comcast's triple play bundle of TV, phone, and Internet can add the 4G wireless component for $30 extra a month. So with the introductory price of $99 a month for the first year, the total would be $130 a month. After the first year, that bundle increases to $130 per month, so it would cost subscribers with the 4G wireless service $160 a month.

For subscribers who want more ubiquitous coverage, Comcast is offering a 3G/4G service that provides wireless connectivity on the Clearwire 4G network when it is available and on Sprint Nextel's 3G wireless service in other areas where 4G is not available. The cost of this service is an additional $20 per month.

Existing Comcast customers can add the new service for $30 more a month to their existing packages. And they can add the nationwide access with 3G access for $20 more per month.

Comcast has had its eye on the wireless market for quite sometime. The company bought wireless spectrum in the Federal Communications Commission's wireless spectrum auction in 2006. So far, the company hasn't said what it plans to do with that spectrum. But it has at least 10 years to decide, after which time the FCC could ask for the licenses to be returned.

Comcast has also worked with other cable operators to form a joint venture with Sprint Nextel in 2005. This joint venture was supposed to allow Comcast to bundle its broadband, TV, and telephony services with Sprint's wireless services. But the partnership never really got off the ground.

This time, Comcast thinks it has the right service package that will finally offer consumers a compelling product mix. The company is interested in not only using the service to help it win new customers but to also help it keep existing ones who may be tempted to defect to phone company competitors.

"This is really our first entree into expanding our in-home broadband service in combination with a wireless Internet service," said Catherine Avgiris, the company's senior vice president and general manager of wireless and voice services. "We are trying to get those consumers, who may not have chosen Comcast's broadband services in the past, to see that they can get the best and fastest in-home and wireless service from Comcast. But we are also trying to make sure we can keep the customers we do have from going to a competitor."

While it's clear that Comcast is using this new service to compete against its phone rivals, namely AT&T and Verizon Communications, it will also be competing against its partners Clearwire and Sprint Nextel, which will also be selling the same WiMax service to consumers.

Clearwire's service called Clear starts at $20 per month for in-home wireless broadband. And its mobile Internet plans start at $40 per month. Customers can also get a day pass for $10. The company also allows customers to add voice service to their in-home package for $25 per month.

Sprint is also offering a 3G/4G wireless service for people living and traveling regularly to places with 4G wireless coverage. For about $20 more a month, Sprint wireless data customers can get access to its 3G network plus the 4G Clearwire network for $80 per month. Sprint's regular 3G wireless data service costs about $60 per month.

AT&T and Verizon haven't included their 3G wireless data services into their in-home broadband and TV services, but the companies have been offering special deals for wireless customers. And both operators have announced Netbook offers where they subsidize the cost of these mini-laptops in exchange for a two-year service commitment. AT&T has also given free Wi-Fi access for its more than 20,000 Wi-Fi hotspots around the country to its broadband customers as well as some smartphone users.

AT&T isn't the only Wi-Fi provider that could compete with Comcast's 4G wireless service. In cities, such as San Francisco, there is already quite a lot of Wi-Fi in public places thanks to services like X. And in Philadelphia where EarthLink had deployed a citywide Wi-Fi network, Wi-Fi is still available for free in some locations.

Comcast isn't completely down on Wi-Fi. The company also offers a Wi-Fi solution in cooperation with Cablevision, a cable operator serving the New York area. The two companies are deploying Wi-Fi hotspots in train stations and on train platforms along the North East corridor from Philadelphia to New York City. The Wi-Fi access is free to Comcast and Cablevision broadband subscribers.

But Wi-Fi doesn't offer ubiquitous coverage. So these networks aren't the best answer for every consumer. But the success of Comcast's 4G wireless service is very much dependent on price. The company has priced the first year of the service extremely well, making it the hands down winner in terms of value for consumers. But it will be interesting to see if consumers are still interested in the service once the promotion is over.

The other potential downside to the service right now is that consumers will only get one USB laptop card per account. This might make it hard for families with multiple family members who want wireless broadband service outside the home. And this is also a problem for small businesses, which Comcast is also targeting with this service.

That said, Avgiris said that Comcast is working on a solution and will be offering multiple wireless cards for an additional cost. But the exact pricing of these cards and service hasn't been determined just yet.

Clearwire named networking equipment maker Cisco Systems as a key supplier to help it build its nationwide 4G wireless network, the companies announced Wednesday.

As part of the new strategic partnership, Cisco will provide IP routers and other equipment to build Clearwire's network, which uses a technology called WiMax. Cisco will also develop some consumer devices that can be used on the network. Cisco wouldn't provide specifics about the new products, but a Cisco representative said that these devices will be sold under the Linksys brand and are expected to be introduced later this year.

Cisco, which is the world's largest supplier of Internet infrastructure equipment, has also been developing WiMax radio gear for a while. The company bought WiMax equipment maker Navini in 2007. But the company has mainly focused its WiMax radio products on fixed WiMax offerings that deliver broadband service to businesses and homes in areas where traditional land-based broadband infrastructure is unavailable.

Suraj Shetty, vice president of worldwide service provider marketing for Cisco, said that Cisco will still focus its WiMax business on building radio equipment for fixed broadband in the developing world. And he added that the deal with Clearwire is only to supply Internet infrastructure and consumer devices for Clearwire.

The companies did not disclose financial terms of the agreement.

Clearwire is building a nationwide wireless broadband network using WiMax. Late last year, it merged its wireless assets with spectrum from Sprint Nextel. And it has received billions of dollars in investment from Google, Intel, Comcast, and Time Warner.

The company has said that by the end of 2010 it expects to have service in over 80 markets with access to more than 120 million customers.

AT&T and Verizon Wireless, the two largest cell phone operators in the country, have already said they plan to use a competing technology known as LTE to build their 4G networks. Verizon will begin testing its this year and expects to begin commercial deployments of the service early in 2010.

LAS VEGAS--Wireless operator Clearwire is offering application developers in Silicon Valley free access to its 4G wireless network in the hopes that they will come up with cool applications for the new service.

Ben Wolff, co-chairman of the company, announced the new WiMax Innovation Network during a speech at the CTIA Wireless 2009 trade show here on Thursday.

The network will cover more than 20 square miles in the heart of Silicon Valley and will bring 4G wireless service to campuses of big technology companies, such as Google and Intel. Service is expected to be available to developers by late summer of this year. The company is offering the service free to developers for a year, but developers will have to pay $49.99 to buy a WiMax USB modem. To qualify, developers must register for Clearwire's developer program and describe the products or business ideas they wish to pursue.

"This is not a lab in some tall building," Wolff said during his speech. "This is a 20-square-mile sandbox that will give people the ability to really innovate."

Wolff added that the company decided to open the network up to developers because executives recognize the need for new applications to drive demand for its service.

"We know we need killer applications for our network," he said. "And we know we aren't the folks to build the best applications. That's not our core competency. So we are encouraging third parties to take advantage of our network."

Clearwire is building a nationwide wireless broadband network using a technology called WiMax. Late last year, it merged its wireless assets with spectrum from Sprint Nextel. And it has received billions of dollars in investment from Google, Intel, Comcast, and Time Warner.

The company currently offers service in two cities: Baltimore and Portland, Ore. And it's announced 10 more markets for later this year. By the end of 2010, the company plans to have service in over 80 markets with access to more than 120 million.

LAS VEGAS--On the eve of the CTIA Wireless 2009 trade show here, Clearwire has announced a portable Wi-Fi router that will use Wi-Fi to connect devices such as smartphones and cameras to its new 4G wireless network.

(Credit: Cradlepoint)

On Tuesday, network operator Clearwire, which is building a nationwide WiMax network, announced the Clear Spot, which is made by CradlePoint.

The compact, battery-powered device connects up to eight devices to the Clearwire WiMax network via Wi-Fi. It costs $139 and is expected to go on sale later this month.

Clearwire said the Clear Spot will work with most Wi-Fi-enabled smartphones, including the iPhone, some BlackBerry devices, Windows Mobile phones, the T-Mobile G1, and the Palm Pre. It will also work with Wi-Fi-enabled game and music devices, as well as Wi-Fi-ready digital and video cameras.

The purpose of the device is to extend and provide access to Clearwire's WiMax network. Intel has already started manufacturing WiMax chips. And some laptops have the technology embedded in them.

Eventually, other consumer electronics devices will also get WiMax connectivity. But until then, there aren't many devices that can connect to the Clearwire network. By contrast, there are millions of devices already on the market that have Wi-Fi connectivity. The Clear Spot router allows these Wi-Fi devices to access the Clearwire WiMax network.

"While many (consumer electronics) devices will eventually include embedded WiMax technology, our customers can now easily use their existing Wi-Fi-enabled phones, cameras, game systems, or laptops in compelling new ways," Scott Richardson, chief strategy officer for Clearwire, said in a statement.

Clearwire currently offers WiMax service in Baltimore and Portland, Ore. The company has plans to add service in another eight cities in 2009, and it expects that by the end of 2010, it will be able to offer its WiMax service to 120 million users. The service is available for $10 a day, or consumers can sign up for a monthly service starting at $30.

Clearwire isn't the only service provider tapping into the power of Wi-Fi to reach more consumer devices. Verizon Wireless is also reportedly getting ready to launch a new device known as the MiFi 2200, which is made by Novatel. This device also creates a personal Wi-Fi hot spot that uses Verizon's 3G wireless network to connect to the Internet.

Verizon isn't commenting on the new device. But Novatel is showing off the device here at CTIA.