The teaming of cable and wireless gained momentum with the Sprint/Clearwire deal to build a new company for $3.2 billion, half coming from cable.

All parties insist it’s a win-win, especially for WiMAX and 4G technologies. Yet it’s clear the new company, and WiMAX, are serious money bets by both Clearwire and Sprint, neither of which can afford to lose.

The Pivot joint venture was a misadventure into cable for Sprint. And once its execs glimpsed the $20 billion price tag for the AT&T network upgrade, they looked to WiMAX and 4G networks as a better–cheaper and quicker–way to cover targeted markets. Builds, trials, launches The new network, according to Sprint, will provide 2-4 Mbps on the downlink and half that on the uplink, with the first access devices being connection cards, modems and Nokia’s N810 Internet tablet. And data will play an increasingly vital role.

"We’re building WiMAX in Baltimore, Chicago, and Washington, D.C. It’s not a cellular network. We’re building it from the ground up for data," a Sprint spokesman said.

In addition, the cable partners are likely to have more input into the new company, deepening their interest in wireless service, which most cable operators agree is absolutely mandatory.

"Wireless gives us an offensive opportunity, and we’re looking for partnering opportunities while considering time to market, economics and integration of wireless into our wireline services," said Dallas Clement, SVP for strategy and development at Cox Communications, at NCTA’s Cable Show in New Orleans.

Cox is not part of the cable triumvirate (Bright House, Comcast and Time Warner) that has put $1.6 billion on the table for new company. Cox has its own wireless build plans. That shared investment, however, will allow cross-marketing between 4G, Sprint and the three MSOs, and also advance the data play, which according to Sprint is "the next big thing."

Big indeed. Research group ABI estimates capex investment in mobile communications worldwide, most notably data services and 4G preparations, topped $131 billion in 2007 and will reach $163.5 billion by 2013. And capex for data services will surpass voice in 2009 as 4G starts to arrive.

Not everyone is betting on WiMAX, however. Alltel, Verizon, Japan’s KDDI and others are pushing LTE (Long Term Evolution), a project designed to improve the UMTS mobile standard. Motorola recently demonstrated LTE at the 2008 Mobile World Congress, and AT&T Mobility intends to upgrade to LTE.

Motorola is playing in both the LTE and WiMAX fields. "WiMAX technology is here today, and LTE next year. The idea is to enable interoperability between the two," said Dan Moloney, EVP and president of Motorola, in New Orleans.

Good idea, but LTE is more like 3-5 years away. In the meantime, look for cable to track closely the protracted WiMAX trials and delayed launches in Baltimore, Chicago and D.C. These efforts, run independently by Sprint, may give the cable partners a preview of what’s to come with WiMAX and how it fits into their futures.

And wireless, said ABI senior analyst Nadine Manjaro, must be in cable’s future. "After Pivot, cable realized it needs a wireless play, so the Clearwire investment is a good one. It gives them more control, and there are lots of WiMAX contracts already deployed, where LTE hasn’t started deployment. Cable must have a wireless play." Not cellular…and not Pivot The time is ripe. "Once the deal is closed, we see a great opportunity for cable to play an active role in branding and with their customers," said Scott Richardson, chief strategy officer for Clearwire.

The partners benefit because the network is "open, flat and not…cellular," he said. "We’re working on the right balance of cable’s needs and our business opportunities, and the build model is very aggressive."

That model includes additional cities: a current soft launch in Portland, OR, and near-future launches in Atlanta, Las Vegas and Grand Rapids, MI.

These are long-awaited market trials for WiMAX and its associated industries. Expectations for the new Clearwire company, due in September, are high. No one wants it to be Pivot part deux.

Craig Kuhl is a contributor to Communications Technology. Reach him at craigkuhl@comcast.net.

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