Long Live the Mobile Operators (update)
Yesterday Clearwire and Sprint agreed to partner together to build out a nationwide WiMax network instead of competing. As a consumer this feels very anti-competitive, but hey, call something a partnership and you can get away with anything.
This Seattle Times article states that Clearwire will focus on building out access for 115 million people in small and medium cities, and Sprint will focus on building out access for 185 million people in the 50 largest cities. They hope to have WiMax access available to 100 million people by the end of next year. There was no mention in the article when they hope to complete the network. Paired with Sprint’s 3G network, mobile data subscribers will have the ability to use WiMax when available and switch to 3G when no WiMax signal is available. Clearwire started with an external access device, but recently obtained FCC approval for a PCMCIA access device suitable for laptops. I’m sure in the future they will be able to slim it all down for direct integration into laptops and other mobile devices.
AT&T may have the iPhone, but Sprint has the vision for the future. As people get used to only having a mobile phone after ditching their landline, they will then start wanting their data to go with them. This Business 2.0 article mentions that in Seoul, South Korea, 90% of the population already utilize data services. The iPhone may help move American consumers toward the idea of their data going with them, but iPhone users will tire of the data speeds they have with AT&T and yearn for faster access. AT&T has a five year exclusive on the iPhone, but don’t be surprised if Apple and iPhone users force AT&T to unbundle data access or if AT&T does a deal to MVNO Sprint/Clearwire’s data network in place of their own. Sprint will have to make the decision of whether to maintain their WiMax/3G network as a closed network or sign some of the biggest MVNO deals in history.
Sprint has staked out a great technology position and has the potential to build a lead and then use competitor’s money to maintain that lead. Or, they could maintain a closed network and try and copy the iPhone as closely as possible and hope customers will switch to their network because of the faster data speeds. AT&T is getting switchers with the iPhone, but the iPhone is a tad bit sexier and easier to sell than a faster network. Sprint has a faster data network already and people still buy data access from AT&T and other carriers.
I believe Clearwire will want to allow other carriers to MVNO, but I’m not sure about Sprint. If Sprint/Clearwire allows others to white label their WiMax/3G data network, they could cripple the baby bells and potentially kill the cable companies. Baby bells would be all but dead in the consumer space and relegated to a business focus. Cable companies would start to see the second leg of their triple play disintegrate, pushing them back to multi-channel television. With baby bells and the Internet eroding the multi-channel television market, and no substantial business voice or data markets to fall back on, I wouldn’t be shocked if some cable companies went dark in the next ten years.
That leaves us with a few questions:
- Who will fight the Clearwire/Sprint WiMax monopoly?
- Will Sprint have the wisdom to MVNO their data network?
- What will the cable companies do?
- Can Sprint overcome their reputation for shoddy service and stop bleeding market share to T-Mobile and the rest?
Braden Kelley is a Social Business Architect and the author of Stoking Your Innovation Bonfire from John Wiley & Sons. Braden is also a popular innovation speaker and trainer, and advises companies on embedding innovation across the organization and how to attract and engage customers, partners, and employees.