Sprint Nextel Co. announced Friday that it will cease selling devices compatible with Clearwire’s network at the end of next year. Clearwire is a wholesale provider of WiMAX 4G wireless service and is majority owned by Sprint, who is also currently their biggest customer. This revelation came on the heels of Sprint’s decision to move into LTE territory, WiMAX’s biggest 4G competitor.

Sprint was the earliest of the major wireless carriers to offer 4G service. Back in September of 2008. their decision to opt for WiMAX technology gave them a competitive edge over their rivals. Recently, however, LTE, the next generation standard of choice for big guns Verizon, AT&T, and T Mobile, has been enjoying rapid gains and is set to overtake WiMAX in the near future. Sprint has thus elected to cut its losses and throw in with the Long Term Evolution Club.

This seems like the kind of thing that would leave Clearwire in the lurch, a hypothesis supported by the company’s dipping stock value. The Clearwire brass don’t seem unduly perturbed, however. “I don’t think anything fundamentally changed for us after today,” Clearwire CEO Erik Prusch said. “Sprint is still dependent on us for their network.”

Clearwire’s relative nonchalance may have something to do with LTE plans of their own. The spectrum operator is looking for funding to convert their vast holdings to support LTE, a task made easier with rival LightSquared tied up in Washington over GPS signal interference allegations.

Sprint, for their part, has begun constructing a network of their own. Their holdings are expected to exceed that of Clearwire by the end of 2013.

Dish Network has expressed an interest in either partnering with a wireless carrier like Sprint or Clearwire or buying them outright, Forbes reported. Dish purchased satellite operators Terrestar and DBSD North America, saving them from bankruptcy earlier this year, and is now looking to make use of the wireless spectrum acquired as a result.

“We’ll look at partnerships, acquisitions, all of the above,” said Dish CEO Joseph Clayton, according to Bloomberg.

Upon this announcement, Sprint’s stocks jumped, as a deal like this is predicted to significantly aid in correcting Sprint’s and Clearwire’s current 4G woes. Concerns that such a merger would result in a legal deadlock after the AT&T/T-Mobile model have been assuaged – AT&T has been accused of decreasing competition while Dish would serve to provide a new player to the market. AT&T is currently fending off multiple anti-trust suits from the Department of Justice, Sprint Co., and regional carrier Cellular South.

A deal like this would help Clearwire get the $150-$300 million in funding it so badly needs to implement spectrum maintenance as well as the additional $600 million required to launch its LTE network. Furthermore, Clearwire could afford to abandon talks with wireless carriers to sell its excess spectrum – holdings that are considered the WiMAX operator’s most valuable asset. Clearwire has been negotiating to this end with the likes of Verizon, AT&T, and Metro PCS, the 1st, 2nd, and 6th largest national carriers, respectively.

There are several missing pieces,” Clayton said. “Wireless infrastructure, additional technology capabilities and even distribution are pieces that we’re still working on. Stay tuned.”

With their vast spectrum holdings, Clear will become the main player where 4G is concerned. Bandwidth consumption is exploding and the need for speed is the here and now. I don’t think all the spectrum from all of the carriers combined would total what Clear has to offer.

Clear is talking to all the major carriers about providing capacity to operate their networks as well. I have often said how important Clear is to this space. They started this wireless data as a portable service, and have moved on to give it wings. Their policy has always been take all you want, no caps, and that is what 4G is really about.

To stay competitive, Clear finally made the move to go with LTE. I think they should have made the news about six months earlier, as this would have made their case for needed funding much easier. So what we are calling the 4G of today is not the 4G of tomorrow. And tomorrow’s 4G is fast, and unlimited.

I wrote articles back in 2008 about how tough it was going to be for Clear to compete with the recurring costs of the many licenses they lease. There is a trade off here: it costs much more to build out 2.5 GHz, than it does 700 MHz. However where I see this going: more towers, closer together, with 140 MHz per market, means a more robust network, and that is where the speed demon Clear will excel. If Clear can get the funding they are seeking to build out their LTE side, they will be hitting the 100Mbps threshold long before any other carrier can. And that is true 4G.

This Sprint-Clear relationship is complicated, but I don’t see Sprint cutting loose their ties with Clear. Sprint had to distance themselves from Clear so that Clear’s problems didn’t become Sprint’s as well. They are married through devices, and that will not be changing any time soon.

Consumers have more power today thanks to Clear, and tomorrow only gets better. However there is this little 600 million dollar thing that has put the brakes on it for now. I am certain that they will get their funding. Clear is the only true 4G carrier, not just in terms of speed but the entire concept of what 4G is meant to be: open, unlimited, no borders, fast, and mobile.

Last year Clear abandoned the development of their mobile device as they were in a cost cutting mode. Now, they are talking to China, who is also TD Wimax at 2.5GHz, about building a smart phone for their network. This creates an easy path for Clear to obtain a device for their needs, with just some software tweaks. This is an important area for Clear and is what they need to re-establish themselves as a major 4G competitor and to help tear down the walled garden model of minute monopolies. This is the making of some very good news for the Clear brand and could get the company more than enough funding to build out their 4G network. The major carriers are going to be in a transition for a long time with 3G, slowly moving to 4G. Clear is only 4G, no transition needed. However a good mobile device is needed to help spank some sense into Clear’s competition. This is where 4G starts to really gain some traction, as an all you need technology. I cannot re iterate how important Clear is to us moving forward and firmly establishing what 4G is supposed to be. Clear’s growing pains may well be behind them as this device becomes a reality.

This China collaboration is some huge news for Clear, since they share the same 2.5GHz band and WiMax. In addition, the device they are building is a smart device. Notice I use the term “smart device,” because 4G is not in the same family as the cell phones we know. Clear’s collaboration with China will produce a dual mode device with TD WiMax, and TD LTE. The closer this device gets to market, the closer we all come to true 4G. Then, Clear can finish their TD LTE network and true 4G will be born. Even if Clear’s network only works at 1/3 the speed advertised, 33 Mbps is still giddy up.

Investors should not be scared to take a real hard look at this. It looks very promising to me, that a new smart device will make all the difference in the world and will serve to chum the investor waters.

Rumor has it that Sprint is in talks with Clearwire, to acquire the struggling WiMAX provider. Currently Sprint has a 54% stake in Clearwire and they might be looking to buy out the remaining shares. Bloomberg reported that Sprint may be partnering with several cable providers, including Comcast and Time Warner, to come up with the money needed for an acquisition. This comes as surprising news, as it was believed that Sprint would drop Clearwire after entering a 15 year agreement with Lightsquared. Some analysts believe that Sprint is hedging their bets, in case Lightsquared’s network gets put on hold by the FCC. If Lightsquared tanks, Sprint would have Clearwire’s network to fall back on.

Recently Clearwire announced that it plans to supplement their WiMAX network with an LTE network. To expand their current WiMAX network and build up an LTE network, they would require more than $600 million. According to Craig Moffett, an analyst at Sanford C. Bernstein & Co, it is unclear where Sprint would get the money to build an LTE network from the ground up. If Sprint can successfully build up Clearwire’s network, it would give them an even footing with Verizon and AT&T.

If Comcast backs Sprint financially, it would give them access to a wireless network. This would enable them to offer quadruple play: cable television, home Internet, telephone and mobile Internet. Currently both Verizon and AT&T offer quadruple play packages, having another provider offering service can only be good for the consumer.

At the end of July, a pretty significant agreement was reached between Sprint and LightSquared that would share its network infrastructure with the new network, and that it would essentially be receiving a free LTE network if it agreed to build on top of its existent towers. Further, Clearwire, Sprint’s WiMax partner, has made no further plans for WiMax expansion. Instead, Clearwire has committed to incorporating LTE into its network, and eventually upgrading to LTE-Advanced several years down the road. Essentially, it seems WiMax has been left in the dust.

Broadcom, a wireless chip manufacturer, was asked this week about the WiMax situation and its future. Guess what they answered? Yes, WiMax has been abandoned. Last year, Broadcom acquired a company called Beceem that was a leader in chipsets for 4G WiMAX and LTE. Michael Hurlston, General Manager and Senior Vice President of the Wireless LAN Business Unit at Broadcom said that the Beceem team is more or less done with WiMAX.

“The WiMAX business is getting isolated to certain geographies,” said Hurlston. “It’s doing well in, for example, India, and doing relatively well in Japan, and somewhat in the Eastern Bloc, but in the U.S., I would say that it’s not doing particularly well. The reason for that is that LTE, the new cellular standard, is coming in and offering what WiMAX purports to offer, which is very wide area coverage at high speeds.”

“Sprint was a big proponent of WiMAX when they got involved with Clearwire, but that effort has largely slowed,” Hurlston continued. “So as it pertains to the United States, at least from our perspective, WiMAX is eddying, it doesn’t seem to be making a lot of progress and we’re not confident that ultimately it will be something that’s going to be very interesting, despite us buying a company that was focused on WiMAX. I think that we’re re-tasking that particular chip team to focus on LTE.”

Last week Clearwire announced that they intend to adopt LTE in addition to their WiMAX network. The plan is for a new 4G-LTE network to be rolled out in areas of high demand to supplement their WiMax network. Clearwire acknowledged that they will need $600 million to fund their ambitious expansion in addition to the funding they need to build up their other networks.

Clearwire entered the mobile broadband market when they began offering 4G-WiMAX in 2008, long before anyone even heard of LTE. Since then they have expanded their customer base to more than seven million customers under their brand and those of their partners. Even with a rapid growth of 1.5 million customers in the last quarter, they are still burdened by a $4 billion debt. To raise capital to fund their $600 million expansion and maintain their other networks Clear could auction off portions of their spectrum licenses worth approximately $4.3 billion, only the licenses drew little interest when they were put up for sale in the beginning of the year. Even if Clearwire can obtain financial backers for the LTE project, it would take approximately a year for them to build up sufficient infrastructure to begin offering LTE service.

It would seem that Clearwire is shifting away from WiMAX towards the more popular LTE. The question is, what will happen to their WiMAX network once the LTE network is up and running? According to Monica Paolini, an analyst for Senza Fili Consulting,”The best option for (Clearwire) probably is to keep both of them for some years” and even if Clearwire eventually stops offering WiMAX, the transition for customers could be seamless with multi-mode devices. Multi-mode devices would feature a chipset that supports both WiMAX and LTE, enabling them to operate on both networks.

The competition for LTE is fierce as a number of networks are looking to offer service on their own LTE network and not act as a reseller. Sprint, a major shareholder and reseller of Clear’s service, announced a 15 year partnership agreement with Lightsquared to develop an LTE network. If Sprint can get their hands on their own 4G network, Clearwire could be left without a major wireless provider as a partner, severely compromising their position. A glimmer of hope is for the merger between AT&T and T-Mobile to fail. This would leave T-Mobile without a viable 4G network, leaving room for them to potentially partner with Clear.

The future of Cleawire is not so clear. With cash running low, some investors fear that Clearwire may default on their debts, as they are not generating enough money. According to Susan Johnston, a spokeswoman for Clearwire, “We have sufficient liquidity to fund our current WiMAX operations for at least the next 12 months…We expect our operations to begin generating positive EBITDA in Q1 of 2012.”

Sprint recently announced that it will start providing the WiMAX service to other carriers. This makes Sprint the U.S. first operator to sell 4G network access to wholesalers.

Sprint is actually also a wholesale customer of Clearwire’s WiMAX service. However, this deal was made possible by the arrangement that Sprint will pay Clearwire $1 billion over the next two years, for network capacity for its customers. Clearwire was already running a wholesale business through Best Buy, cable operators and other partners in addition to Sprint. This new arrangement should still be beneficial for Clearwire. Indeed, Sprint has a much stronger customer base and is able to attract more new customers because it is already an established and trusted cellphone service provider. Clearwire ultimately gets paid for all the new subscribers to smaller carriers buying their 3G and WiMAX networks from Sprint.

As a starter, Sprint only offers the resellers two devices working with 4G WiMAX technology. The HTC Detail (with a slide-out keyboard, a 3.6-inch touchscreen and powered by the Android 2.2 Platform) is essentially the same as the Evo Shift 4G, a very respectable 4G smartphone. Sprint also sells the Sierra Wireless 250 U 3G/4G data card for Windows 7, Vista and XP, and mac OS X. Several other devices will be presented soon, says Sprint Spokesman John Votava.
New Sprint smartphone users will have to pay an additional $10 monthly smartphone fee to support the 3G/4G access a data usage. To Sprint’s wholesale customers, the so-called MVNOs (Mobile Virtual Network Operators), this arrangement is an open door to multiple service and pricing plans aimed at cost-conscious customers or specific demographic groups. Acute targeting might actually be the best (and only) solution for these second-hand sellers as many of these carriers have shut down over the last decade and Sprint even recently acquired one of its major MVNOs, Virgin Mobile.

This 4G WiMAX wholesale agreement comes shortly after Sprint announced a 15-years partnership with LightSquared to provide 4G LTE technology, an alternative to WiMAX. However, Sprint’s deal with LightSquared does not allow it yet to resell  4G LTE service to wholesalers which makes the Clearwire deal special and shows the reciprocal importance of joint development for both companies.

Clearwire announced yesterday that they will be offering a new personal WiFi hotspot for connecting to their 4G Wimax network. With the new Clear Spot 4G-Apollo you and seven other devices can connect to Clear’s blazing fast Wimax network while on the go.

Measuring just 3.4 inches square and weighing less then five ounces the new Clear Spot will keep you connected for six hours on a single charge. A small screen displays information such as signal strength, battery life and connectivity. Clear promises average download speeds of 3-6 mbps with the new Clear Spot, just don’t go overboard as Clear has been known to throttle extreme users. While the Clear Spot will connect you to 4G, it does not support 3G roaming in areas that lack 4G coverage. At the moment Clear does not offer coast to coast service, but they do have coverage in most major cities in the U.S. To see if there is coverage in your area check out Clear’s coverage map.

Clearwire, which currently operates on 4G WiMax, has its eyes on switching to LTE and has recently conducted LTE trials in Phoenix. According to Erik Prusch, Clearwire’s CEO, “We were able to take advantage of the speed to market before LTE was even a glimmer in anyone’s eye. But we recognize the ecosystem in the U.S. will be larger for LTE than WiMax, so we are conscious of that.”

Clear will be offering the new Clear Spot by the end of the month for $99 to purchase the hotspot or $6 a month to lease it. Monthly plans start as low as $45 a month.

According to WiMAX Forum, the number of people being covered by WiMAX networks will reach an astounding one billion by the end 2011.

As of today, 823 million people are already covered and the growth of the WiMAX industry follows the estimations. Likewise, exponential growth also concerns the WiMAX subscriber base, carried by the great results of major WiMAX service providers. In the US, Clearwire announced an additional 1.8 million subscribers just for the first quarter of 2011, while UQ Communications (Japan) grew by 600 percent over the past six months. On a world basis, the number of subscribers reached 17.25 million which represents a growth of about 20 percent between Q4 2010 and the end of Q1 2011.

Carried by the increasing number of people to serve, the WiMAX market develops at the same very rapid rate.  More than 150 countries take part in the global market for WiMAX equipement  and it will reach $6.9 billion in 2014. This growth can be explained by the acceptance of WiMAX in other industry sectors to carry out communication needs. Whether it consists in covering cities with wireless broadband access or as an M2M communication device for smart grid projects, WiMAX is becoming a standard technology in multiple areas.

The WiMAX industry’s momentum relies on the fact that WiMAX is an interoperable technology with a wide available spectrum allowing high speed data transfers and giving companies a competitive advantage over traditional 3G or cable-using competitors.

WiMAX and LTE 4G mobile broadband services are generally considered competitors as they offer similar standards but require different technology to be deployed and implemented. However, as US WiMAX leaders Sprint and Clearwire struck a deal with Lightsquared to introduce LTE services, it raises the question of how realistic and realizable this dual-technology implementation is.

Sprint is not new to combining two competitive technologies. In 2005, its merger with Nextel left Sprint running both its own CDMA network and Nextel’s IDEN network. This proved to be a rather unsuccessful gamble as Sprint lost subscribers in the process and has had to transfer its services from the IDEN network to its CDMA network over the past years. However, WiMAX and LTE technologies are much more similar than CDMA and IDEN used to be and the forecast is definitely not the same. Indeed, the technical barriers of hosting both WiMAX and LTE networks are being overcome as we speak.

Today’s technical requirements for dual implementation are being addressed successfully. Sprint and Clearwire own a very large frequency spectrum available for the LTE band and their WiMAX network is already well developed. Another difficulty would have been to get phone and chipset manufacturers to develop products capable of supporting both technologies for reasonable prices. However, great progress is made as ICT giant Huawei has already launched multiple convergent LTE/WiMAX offerings. Huawei’s products support multi-mode network connections, multiple bandwidths from both technologies and global roaming to switch between different networks. As the risk of building convergent mobile broadband networks and adopting multi-mode devices diminishes, the global industry chain will be more likely to take a step into WiMAX/LTE cooperation, just like Sprint.

But the main issue remains the financial compound of hosting these two different wireless standards both for Sprint and its partner Clearwire. In 2006, Sprint invested $5 billion to launch the first nationwide mobile broadband network on 4G WiMAX with the assumption that taking the first step so early in the competition would give it a powerful advantage. As of today, Sprint’s head start is still paying off. It has one of the most extensive 4G devices portfolio and  still enjoys very high popularity. However, Sprint’s initial time-to-market advantage is slowly diminishing as its main competitors are catching up. Notably, Verizon’s aggressive expansion to numerous major markets has had great success and has triggered remarkable growth in the number of its 4G subscribers.

During the same time, Clearwire has had to face highly increased operating costs while increased revenues from additional subscriptions could not follow the pace. Clearwire’s financial troubles may thus prevent it from having enough cash to invest in new technology.

The synthesis of WiMAX and LTE will take place eventually as Sprint needs to offer both services to stay ahead of industry competitors. This can be done rather simply as they successfully address all technical issues. However, one question remains: will the Sprint/Cleawire cooperation have the ressources to support both networks?