30.8 Million Subs is a Heck of an Estimate by Clearwire

Implications: 1.      How about showing a little humility and only say about or up to 30 million subs on a project that has received well-justified criticism?(Was there a debate between 30.7 and 30.9?) 2.      How can anybody take a company seriously that has the audacity of making projections that are approaching a decade in time? 3.      Clearwire’s recent presentation is not convincing.

Analysis:  While Clearwire uses a dynamic model for its business (based largely on suppositions), it conveniently uses a static model when looking at the dominant wireless providers. There is the false assumption that AT&T and Verizon are going to maintain their current spectrum utilization for 2G and 3G indefinitely.  

Clearwire also stated that “[i]t will come as no surprise if the cellular incumbents decide to maximize the return on investments on their 3G investments before rolling out LTE, which means that we may not see an LTE deployment anytime soon.”  Of course, they are going to exhaust their 3G networks as much as possible.  If they can get away with upgrades on 3G for a while, there is no need to deploy LTE just for its own sake.  

In addition, when Clearwire talks about the price of WiMAX cell sites coming down as  well as the need for additional equipment in eventually transitioning from 3G to LTE, it totally ignores the incredible number of towers, cell sites, etc. that will be necessary to do WiMAX at 2.5 GHz.  Not to mention that the RBOCs have the stability in terms of other businesses to rely on – Clearwire’s supposed “second coming of the Internet” does not.  

Moreover, it is true that “Sprint doesn’t control the company.”  Sprint does not want anything to do with operating the network.  But Clearwire is delusional if it believes that its “all star cast of strategic investors” will not be additional “cooks in the kitchen.”