January 22, 2010
With a covered population of roughly 30m at year-end 2009, Clearwire plans to increase its coverage to 120m by year-end, spending US$2bn to $2.5bn, roughly equal to its aggregate capex from 2005 to 2009 (see Exhibit). In addition to its $1.5bn in debt — which we expect to increase this year — and its lack of overall profitability, Clearwire will face substantial competition from Verizon’s LTE rollout. Verizon’s LTE network of nearly 100m covered will nearly match Clearwire’s WiMAX coverage this year. Furthermore, unlike Clearwire, Verizon has already announced continued coverage expansion with a near-nationwide reach by 2013.
Clearly, Clearwire has plenty to worry about, and so does the rest of the WiMAX community. The operator has publicly stated that it is tied to OFDMA rather than WiMAX. In Pyramid Research’s new report WiMAX and LTE: The Case for 4G Coexistence, I interviewed people at several operators, many of which are increasingly disloyal to individual network technologies. Rather, operators are focused on business models that revolve heavily around timing and the availability of the technologies that best support the business cases. Clearwire, however, is under agreement with Intel to use WiMAX through 2011. By this point, 802.16m, the next iteration of WiMAX, will be available, but will Clearwire have achieved the kind of uptake needed to reach profitability? Subscriber growth thus far has been lackluster and now appears to be heavily dependent on its increasing coverage and, perhaps more importantly, on the sway of three of its equity partners — Comcast, Time Warner Cable and Sprint.
Exhibit: Clearwire’s capex
Source: Clearwire, Pyramid Research estimates
— Daniel Locke, Senior Analyst
WiMAX and LTE: The Case for 4G Coexistence
Research Report published January 2009
The hype around WiMAX is dissipating, but we believe there remain decisions to be made WiMAX around the wireless standard. This report analyzes the existing WiMAX operations worldwide, evaluating operator business models, WiMAX economics, services, the value proposition and the overall market opportunity relative to HSPA and LTE. The objective is to assess which technology deliver the most profitable and popular mobile voice, broadband and video services in the context of specific market conditions: case studies examine UQ Communications (in Japan), Clearwire (the US), Mobily (Saudi Arabia), Digicel (Caribbean), Tata (India), Umniah (Jordan) and Yota (Russia).
Global Mobile Demand Forecast
Forecast published quarterly
Our Mobile Demand Forecast product provides a complete picture of demand trends globally. The Excel output includes five years of historical data and five years of market projections for metrics such as GDP, mobile penetration, subscriptions (by operator, type of package, technology), ARPS and total mobile service revenue (data and voice). The Forecast is based on extensive field research and uses a consistent methodology across all markets, aiming to capture the total spending, from an end-user perspective, on mobile communication services on an aggregate global level. Data from these Forecasts is available online for subscribers to our DataTracker service.
LTE’s Five-Year Global Forecast: Poised to Grow Faster than 3G
Telecom Insider published May 2009
It took nearly six years for UMTS/HSPA to reach 100m subscriptions, but we estimate LTE will take just over four years to reach the same milestone. The number of LTE subscriptions worldwide will grow at a CAGR of 404% from 2010 to 2014 and reach 136m subscriptions by year-end 2014. This Telecom Insider identifies the main technical and business drivers as well as the challenges for the LTE platform and analyzes its market opportunity in comparison with earlier mobile technologies in their first few years of commercialization. The report provides Pyramid Research’s five-year outlook on LTE adoption and examines six of the largest vendors worldwide.
From 3G to LTE: Latin America’s Path to Mobile Broadband
Telecom Insider published June 2009
This Insider focuses on mobile network technologies, analyzing their role in building dynamic mobile broadband markets across Latin America. It examines the state of network technology adoption to identify the role of dominant standards in mobile data growth. It also looks at how competitive pressures from CDMA EV-DO and Mobile WiMAX are boosting that growth, and whether strategic decisions by alternative mobile operators could accelerate 4G uptake. The Insider ends with three case studies of specific conditions in and expectations for Brazil, Chile and Mexico.