WiMax Winners (Google) and Losers (Sprint, Comcast, Time Warner)

Implications: In the short-term, Sprint has salvaged their WiMax opportunity, but a quick look back shows you how much they have really lost.  On the other hand, sly Google had another ace up its sleeve, and their wireless strategy is becoming clearer by the day.

Analysis:

On Sprint’s Pitiful Journey

Sprint boxed themselves in a corner with WiMax, and Dan Hesse and team are lucky to walk out alive.  Ever hear of that trite concept “good strategy, bad execution,” which attempts to excuse the elders for faults of the followers?  In Sprint’s case, after a disastrous merger with Nextel and horrible brand and product execution since the merger, their only real hope has been the strength of their data network, a network most consider the leading network for 4G services.

Yet, Sprint can’t seem to do anything right these days.  They overestimated the network power and readiness.  They overestimated the power of their brand and the ability to overcome setbacks.  They underestimated the impact credit decisions would have on churn.  And then … they overestimated their ability to pay for their last hope, the ambiguous beacon of WiMax.

So, they journeyed to the doors of Clearwire’s McCaw, who journeyed to the doors of Comcast’s Roberts and forced a call through to Google’s Schmidt.  And they begged for money, for no one thought they’d have leverage.  And now they only own a fraction of the new venture – the largest fraction, but a fraction nonetheless.  Something that they needed to control more vigorously than that fraction in order to justify the existence of a strong Sprint.

Now, this weakened Sprint plus the laugholympics media gang will spin off Xohm, or whatever the name winds up being, and Sprint will be left with a very weak and decaying wireless company, attempting to sell off Nextel to British Telecom or any other suitor available.  Then, Sprint will fade away.  WiMax has a much greater chance for success in being spun off.

Comcast and Time Warner Shoot in the Dark

Meanwhile, Comcast and Time Warner look at WiMax as a way to compete with Verizon and AT&T for broadband access.  They can’t think that customers will purchase VoIP through them, do they?  They probably do, as they’ve been projecting this revenue for awhile and haven’t been able to grasp the trend lines quick enough to tell them that that isn’t going to happen.  So, they will also shoot to surpass the wireless providers in Internet access, but prices will fall and the technology, customer predilection, and marketing strategy is unproven.  They are taking a big risk at best.

Google Shows Again Why It Is … Google

Google, on the other hand, is showing a cohesive strategy in the space.  First, they forces Verizon into an FCC auction bid where they have to provide open access and open handsets … to, well, Google.  Then, they released Android to provide an operating system loaded, likely, with all that is Google.  Handsets to be distributed soon.  They partnered with Apple to put some of the best features on the iPhone.  And, now, they are embarking on a deal that would increase the presence of the Android OS and Google search embedded across handsets that utilize this platform. 

WiMax may fail, but it may succeed … and, if it does, Google will have saved $4.1 billion vis-à-vis the spectrum auction.  Meanwhile, Google will have great testing access to this technology, marketing partners who will again shout out the Google name across the airwaves, and the Google search algorithm across the mobile universe.  And they have cash to burn.

A clear and coherent strategy in wireless.  Interesting.