Summary
1. “Cautious” will be the operable term from now on at Clearwire. 2. Most of its major investors will apparently not put up with grand illusions anymore. 3. It is not a “must [that Clearwire deploy] a nationwide network.”
Analysis
It would not be surprising if Clearwire’s new CEO even pulls back further on market penetration plans. With inherently high capital costs and the necessity for “major marketing and customer-acquisition dollars,” the only way the service has a chance is with a more focused and less ambitious game plan. Otherwise, it will turn into an even worse situation than what happened with most of the CLECs. They tended not to build a solid base in a couple of major cities first to lower the risk of failure. Their desire was to expand to multiple areas within a ridiculously short period of time.
In a nutshell, Clearwire will have to redefine the WiMAX opportunity for itself. As we pointed out in previous articles, it has no chance to compete head to head with Verizon on a nationwide basis. With a more targeted offering, a “huge time-to-market advantage” will not be as essential. It is precisely because “launching commercial service in a major metropolitan area like Chicago isn’t as easy as flipping a switch” that a more local or regional type of service is a necessity.
