Mikel Robinson

Clearwire and Cbeyond – but who is Cbeyond?

Mikel Robinson on September 1, 2010

Earlier in the month I reported on the Clearwire Earnings Call that went live from Clearwire’s home office in Kirkland, WA. They took the time to review industry metrics, subscribers, cities they would roll out this year and other pertinent investor info. They also took the time to announce two new wholesale customers, Best Buy and Cbeyond. Of course we are all familiar with Best Buy, the nation’s leading retailer in Consumer Electronics. In fact, I wrote a piece about that which took the time to dissect some of what made perfect sense for Best Buy and Clearwire in the agreement, what led up to it, and how I see it culminating going forward. With Cbeyond, I had to take the chance and do some research. Just who are they, what do they do and where do they do it? Have they been successful at it?

I had the honor of joining with Cbeyond’s Brooks Robinson, Chief Marketing Officer (and CO Founder), and Vince Zappa, Senior Director of Mobile Operations. Cbeyond started in late 1999 with the strategy to target the small business market for Dedicated Voice and Data services over T1. They quickly pioneered impressive cutting edge services, such as providing privately managed VoIP services and dynamic allocation of bandwidth for improved QoS. Over the last few years however, their product offering has been evolving, identifying cost effective ways to integrate an entire software suite of services to their customers for a wide range of pro SMB applications.

In addition to hosted services, Cbeyond entered into an agreement with a CDMA provider to offer mobile voice, mobile data (via blackberry and android devices), as well as mobile broadband via 3G USB dongles and so forth as a true-to-life MVNO. Cbeyond has been very successful with this model; so much in fact that they have achieved over 30% penetration of mobile products into their client portfolio. This means over 1/3 of their customers not only purchase landline services but also mobile as well – very impressive indeed. “[The Clearwire agreement] is really an evolution of our business” added Robinson “we’ve been providing 3G laptop cards and we also provide a wireless backup service as well, essentially used for three components of our customers business,
• Backing up the data of their servers and PC’s
• Backing up (redundancy) for the T1 failover
• Cloud based Automated Attendant
It’s in … Read the rest

Rover WiMAX Officially Hits the Streets

Mikel Robinson on August 30, 2010 | 6 comments

Today, Clearwire and Rover, in a much anticipated web conference, confirmed their partnership on the ROVER brand pay-as-you-go 4G internet service. The service, which utilizes the Clearwire WiMAX network, is available for sale online immediately and in retail stores in select WiMAX markets (Houston and St. Louis). What makes Rover different than the traditional Clear market or Clear product?

On the webcast this morning we were able to gain some insight from Clearwire Chief Commercial Officer Mike Sievert and Rover General Manager Seth Cummings. “Rover is a brand aimed at a new market”, says Sievert, “We are aiming to appeal towards a segment of the market that has been traditionally under-served in the mobile internet arena.” So who exactly makes up the “pay-as-you-go” customer base that they speak of? Sievert quips “The 18 to 24 year old city dwelling youth”, typically urban, who are not fond of counting their minutes or megabytes. There is definitely sound reasoning to attack the market in this way. There are many individuals who love “Truly Unlimited”, like myself, for example. There are however, many customers who enjoy prepay for the simplicity of the billing and, of course, the lack of the 2 year contract. “Generation Y addicts who have grown up only knowing a true all digital lifestyle, who want to cut the cord and don’t like two year contracts” are the target market for the new Rover brand.

The “Network of Networks” title was touted yet again as the sound reasoning for the branding of the new pre-paid flavor service. According to Sievert, over 80% of their CLEAR (retail brand) customer base is tied into a 2 year agreement, no doubt the goal of an aggressive internal sales department in Seattle. Though Clear retail offers a no contract option as well, it is more-than-evident that they are in no way interested in growing their interest through that market base.

In fact, there is no way that Clear wants to deal with the “Cricket Crowd” as a means of growing their overall business. Many of this “market” that Sievert speaks of did not qualify for 2 year contracts in the first place. As someone who has owned businesses both in the “traditional post-pay” and “pay-as-you-go” wireless retail sector, I can say that the “Cricket or Boost” crowd requires a certain stomach to deal with on a day to day basis. … Read the rest

Clearwire LTE Trials – The Fastest Internet on Earth?

Mikel Robinson on August 6, 2010

Perhaps the most important announcement from Clearwire on their earnings call yesterday (at least to those of us who covet speeds faster than a roadrunner on heroin) was the trumpeting of their upcoming bout of LTE trials. The trials are slated to go live in Phoenix in the fall of this year – which is INDEED right around the corner. This begs many questions from those of us who have some knowledge of wireless broadband, engineering principles and commercial deployment intangibles. Lucky for those of us nerds, as well as the crowd here, Dr. John Saw, the Chief Technology officer of Clearwire, was able to share a lot of knowledge in a press release just following the earnings call. Clearwire plans on offering LTE speeds in the real world range of 20-70 Mbps! That is much faster than the 5-12Mbps that Verizon Wireless has announced it will operate its LTE network. Not only will Clearwire offer a faster LTE network, it also plans to test the possibility of a dual WiMAX/LTE network for optimal end user performance, both on the receiving end as well as the backhaul. So what does this all mean? If you decide to read ahead, you will find out plenty about how it all works, and why Clearwire may well be poised to deliver some serious competition in the mobile broadband market.

How many bytes can we push here?
Remember the days of pulling out your cell phone antenna, standing on one foot and doing all but a dance and jig to potentially catch a cell phone signal from somewhere in the air? As any of us can remember, coverage was something not taken for granted, and the use of the mobile device was sweet indeed. Fast forward a decade or so and the two largest carriers hired their actors and producers to poke and prod at each other’s “maps” with one boasting the other was garbage and the other claiming the latter was a lying jerk. My point here is that those days – at least for a few seasons – are through:
“In a 4G world, wireless coverage is important, but capacity is KING. This capacity is a unique and sustainable advantage for Clearwire, thanks to our all-IP network and unmatched spectrum holdings.”
More on the spectrum holdings in a moment – but let’s talk about the capacity that they’ve been touting. I’m … Read the rest

Live after the Clearwire Earnings Call

Mikel Robinson on August 5, 2010 | 3 comments

Clearwire waited until today to post their earnings and other statistics from the 2Q 2010. There were many highlights to the session, which lasted about an hour and came live with representatives from all of the major investment institutions. The earnings call offered some much needed insight into the direction of the company for the next 6 to 12 months, including information from Bill Morrow (CEO) Erik Prusch (CFO), and John Saw (CTO) on the much rumored LTE trials that Clearwire has been and plans to continue conducting.

The Executives corralled in assorted investment bankers from Citi, UBS, Deutsche Bank and others to discuss the activity of Clearwire. Many of the announcements were along the lines that analysts predicted:

Posting a quarterly adjusted EBITDA loss of $363.2 million
net loss of $125.9 million
revenues up almost 100% year over year of $123 Million.

In addition to the rigmarole typically accompanying an earnings call for shareholders, company executives took the time to discuss some bits and bytes that, until today had all been the speculation of fact and fiction. Clearwire formally announced the launching of the Boston, MA market “in a few short weeks.” They acknowledged the agreement with Best Buy, the first wholesale client who is not a strategic investor and also announced a similar agreement with Cbeyond, an Atlanta-based hosted VOIP provider for SMB organizations. .The gentleman also took the time to thank shareholders for their patience as they highlighted key metrics that were successfully attained in the company:

2Q total net subscriber adds of 722,000, of which
595,000 were WHOLESALE customers (from Sprint, Comcast, Time Warner, etc)
2Q ending total subscribers of 1.7 million, up 231% YOY
Retail churn listed at 3.2% nationwide
POP penetration in maturing markets (Atlanta, Law Vegas and Portland) of 3.2%, up from 2.7% in 1Q 2010

The figures above are very impressive, measured against any standards. The Company has managed to, in the midst of a credit restricted economic climate, embrace the users desire for more choices and, more importantly, unlimited usage of a high bandwidth capacity (Clearwire users consume over 7GB a month – a multiple of the average 3G user of todays leading carriers). Not only have they signed up a record number of users under the CLEAR brand but they have assembled (officially) over 1 million wholesale subscribers. They “will continue … Read the rest

Sprint to Buy Remaining Ownership of Clearwire?

Mikel Robinson on August 3, 2010 | 18 comments

The writing has been on the wall almost since its inception, with a trail of clues leading from Wall Street to Overland Park, KS all the way west to Kirkland, WA, the days of Clearwire operating its own network under its own board of directors and, most importantly, under its own symbol on the ticker may be drawing close to an abrupt and uneventful halt. Sources familiar with the matter told the Wall Street Journal that Sprint Executives, most particularly Dan Hesse are disappointed at Clearwire’s Network Expansion and deployment as well as its overall strategy. Not a very desirable choice of words as Clearwire is due for another round of funding here by the end of the year. It is expected that Sprint will use over $1 Billion in cash to provide for this round of aid and debt obligations – however, with a disappointing network Sprint could very well use its cash to simply buy out the remainder of Clearwire’s ownership in the company. Dan Hesse himself, in a recent earnings call with Goldman Sachs, JP Morgan Chase, Citi Group and others is slow to add fuel to the speculative fire:

“I get a lot of questions about Clearwire and about Sprint’s network RFP. On the topic of Clearwire, we have an advantage in the aligned ownership interests we share with the cable partners, Intel and Google and we benefit from the many contributions they have brought to the table and we benefit from the resale of 4G services… As in the past, any strategic or funding decisions about Clearwire must be a collective decision among the strategic investors and the Clearwire Board. Beyond that, we are not going to comment on the ongoing media speculation.”

That’s CEO speak for “DROP IT, I’m not here to degrade Clearwire’s already poor stock position”. It makes no difference whether Clearwire decides to sell NOW or LATER, their position has been (from the beginning) to acquire as many customers as possible in an effort to be taken over by a carrier that doesn’t have its own spectrum (think Comcast OR of course Sprint). However the recent success in the new Clear markets should slow the speculation for now as Clearwire is on pace to hit corporate metrics and surpass 2 million customers by the close of business 2010.

… Read the rest

Best Buy the Latest Customer of Clearwire for Not So Dubious Reasons

Mikel Robinson on August 3, 2010

Just weeks after Best Buy announced that they would resell the Sprint 3G network under the “Best Buy Connect” brand, the company has announced that they will add a 4G tier, or even possibly 4G included with their USB devices and forthcoming mobile hotspots. According to Jed Stillman, VP of Best Buy Connect:

“This agreement paves the way to providing one-stop shopping and support for mobile broadband as more people become more connected across all kinds of devices,”

The truth is that this agreement comes in lieu of two simple facts:

· Best Buy Mobile is one of the most successful and disruptive forces in mobile phone retail

· Best Buy has been a KEY POINT OF DISTRIBUTION for CLEAR WiMAX.

In fact, the former of the two bullets is what no one is talking about, but is THE MOST OBVIOUS REASON for Best Buys new found commitment to the Sprint/Clearwire network. In each and every market that Clear launches, Best Buy stores that (before CLEAR) are already successful retail locations ALSO happen to be the best retail stores for CLEAR sales. All of the last year Clear has had their own corporate reps selling CLEAR WiMAX inside Best Buy to their customers – some Best Buy stores move anywhere between 250 and 300 CLEAR ACTIVATIONS A MONTH – ALL OF THEM TWO YEAR CONTRACTS!!! For any of you who know the revenue that Clear is paying (as I do) for these activations you know that CLEAR IS A CASH COW for best buy. Keep in mind that the COOL devices for Clear are just now starting to launch (MiFi’s etc). In essence, Best Buy smelled something cooking, and they ordered their own chef to whip up their own version of the same dish.

The news comes just in time for Clearwire, as they are teetering on the weight of their own debt, their own pressure, and ultimately their own deadlines. They have committed to having 140 million POPs covered time and again by the end of 2010, yet if you go to www.clear.com/imap they do not even have their TOP markets (New York, LA, San Fran, Miami, Denver, Cleveland, Columbus, Dayton, and Cincinnati) listed as “future markets” which is most terrifically odd considering that those markets I listed would account for more than 35 million POPs by themselves. In addition, there is … Read the rest

WiMax vs. LTE: LIVE in NYC – NOVEMBER 15, 2010 (finally )

Mikel Robinson on July 2, 2010 | 4 comments

While there may be more important news breaking in the world; Oil gushing through beautiful habitat, 3D TV becoming a reality or top military brass slamming the Obama administration from the likes (of all places) of a Pop culture oasis, Verizon has announced that they will launch LTE in 25 markets covering 100 million POP’s on November 15, which should include the New York City metro area. The announcement is the first solid date of a Verizon LTE launch. The tech-savvy of this beautiful land finally have the battle, neigh, the showdown of a lifetime brewing in major markets across the country. It may very well turn out to be the most perpetual and ultimately trivial of match-ups in the history of technology – alas, the crew here in Manhattan is preparing for the final Armageddon of Next Generation connectivity.

Healthy Competition

It seems as though there’s been a lot of speak about the possibilities regarding the future of “unlimited data:”

“We will probably need to change the design of our pricing where it will not be totally unlimited, flat rate.” John Killian, CFO at Verizon said.

These kinds of statements aren’t surprising to me, given the natural inclination for users to “abuse” or overuse high bandwidth connections of any kind. In any event, I wonder what the tiers will actually boil down to – Will Verizon continue with its historically costly premiums for not that much bandwidth? Here’s an example of a Data plan that I could live with:

3G/4G access combined

20GB – $60/month
10GB – $40/month

I can accept this because Verizon will always charge a little more than EVERYONE else but still offer a great product. Personally, I will just continue to use my CLEAR account, which is $40/month (4G ONLY) for “UNLIMITED” data usage.

One in the Same

Sit down and speak with any expert and you will find that the similarities between WiMAX and LTE are striking. There are differences in modulation scheme both in the downlink and the uplink; both utilize different radio hardware and CPE units (obviously), but I won’t go into the nuts and bolts here. The two technologies are NOT CDMA VS. GSM. The differences between the two are less like OBAMA VS MCCAIN and more like OBAMA VS CLINTON; more of a “sibling” rivalry so to speak. Both technologies were designed at their core to carry data in … Read the rest