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WiMAX USA: $3.2 billon and counting...

After much secret dealing and many, many rumours, potential alliances and posturing, WiMAX is finally getting going in the USA. The Wall Street Journal is saying that Sprint Nextel and Clearwire's joint venture is finally shaping up, with a billion from Intel, a billion and change from cable company Comcast, half a billion from Google and a bit over half a billion from Time Warner Cable - oh, and a hundred million from Bright House Networks.
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Written by Rupert Goodwins on

After much secret dealing and many, many rumours, potential alliances and posturing, WiMAX is finally getting going in the USA. The Wall Street Journal is saying that Sprint Nextel and Clearwire's joint venture is finally shaping up, with a billion from Intel, a billion and change from cable company Comcast, half a billion from Google and a bit over half a billion from Time Warner Cable - oh, and a hundred million from Bright House Networks. The service will have broadband and voice, and be sold by cable companies under their own names.

You'll notice that Sprint's Xohm idea is absent - this was the great idea that gadgets would sprout WiMAX and use it to talk to each other and the Internet. I never got any good answers about how that would actually work - it looks good on PowerPoint until you start asking about how the accounting, billing, usability and security would hang together when you have to start doing things like adding your new digital SLR to the network.

Also absent, I fear, is any hope of the darn thing making money. The backers are an unholy alliance of people doing it because they're annoyed at not having a slice of mobile and are scared of where that lack will lead. These are sensible emotions, but the response is not: the chances of that lot agreeing on anything beyond the colour of the boardroom wallpaper are slim, especially when (as will happen) cash gets tight before the network starts to make money. The amount of investment needed to create an entire industry capable of taking on the GSM/3G monster is orders of magnitude greater than the figures mentioned above, and there won't be time to grow it organically before LTE turns up in its finery.

GSM has an installed base of half the world. There is a linear, credible and largely proved roadmap from $10 handsets to multi-megabit broadband and beyond. Yesterday, I travelled 400 miles on a train using GSM-based wireless broadband that was so cheap that the railway company could afford to give it away - and it worked, as it's worked for years now.

I know the US is a bit behind on this sort of thing, but imagining that this confers some sort of magic shield from the global dynamics of wireless broadband is as daft as splurging billions on an international satellite telephone network because the US cellular companies couldn't make roaming work.

Clearwire should take its investors money and blow it on hiring the state of Montana for a month-long, all-comers, free rock festival with an on-site brewery. Fly The Who in on jetpacks. Everyone will have a lot more fun and then we can all get on with the rest of our lives. And I bet the ROI will be better.

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