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 a growing divide in the deployment strategy between Clearwire and Sprint Nextel – the same Sprint Nextel who is THE MAJORITY OWNER of Clearwire!!!
“Theoretically, if you had control, you could decide which markets get built out next and decide who is in management,”
That quote comes directly from Dan Hesse in Sprint’s latest earnings call. The potential for Sprint to buy out the remaining shares of Clearwire are potentially nearing the event horizon and we will keep you posted for all the latest news.