Clearwire inks wholesale LTE deal with Leap

[503ducati]

http://www.fiercewireless.com/story/...eap/2012-03-14

Clearwire (NASDAQ:CLWR) said that Cricket provider Leap Wireless (NASDAQ:LEAP) signed a five-year wholesale agreement that will allow Leap to buy capacity on Clearwire's forthcoming TD-LTE network. Financial terms of the deal were not disclosed.

The deal is a feather in Clearwire's cap. Clearwire to date has been relying on majority owner Sprint Nextel (NYSE:S) as its largest wholesale customer. Sprint has already committed to taking advantage of Clearwire's LTE Advanced-ready network, which Clearwire will launch next year.

Moreover, Clearwire has lost customers including Comcast and Time Warner. The cable companies had resold Clearwire's WiMAX services, but recently inked a deal with Verizon Wireless (NYSE:VZ) to sell Verizon's offerings (as part of Verizon's purchase of their AWS spectrum).

Leap said that capacity from Clearwire's network will supplement its own LTE network buildout. Leap plans to deploy LTE across roughly two-thirds of its current network footprint over the next two to three years. It plans to cover around 25 million POPs with LTE by the end of 2012. Leap currently has a 3G CDMA roaming agreement with Sprint--the deal allows Leap to sell Cricket-branded service in areas where it does not operate a network, effectively making Leap a Sprint MVNO.

Clearwire could earn $50 million from its deal with Leap in 2013, according to a recent research note from Credit Suisse analysts, "assuming half of their [Leap's] 6.7MM average subs consume 0.5GB / month (roughly 25% of their total consumption) at $5 / GB and 6 months of usage."

Credit Suisse analysts said Clearwire's revenue from Leap could more than double in 2014. However, they cautioned that Clearwire's revenues from Leap would be contingent on which Leap markets Clearwire ends up supporting with its LTE network.

Clearwire intends to launch 5,000 TD-LTE cell sites by June 2013, and Clearwire CEO Erik Prusch has said that "not too terribly long" after the first 5,000 sites are online, Clearwire will expand that coverage to 8,000 sites. Clearwire hasn't yet disclosed the locations of those buidouts. Prusch has said that Clearwire won't be as focused on POPs covered with its TD-LTE network as it was with its WiMAX network. Instead, the carrier will instead focus on how much data traffic it can transmit across its network--presumably to get as much as wholesale revenue as possible.

Clearwire recently raised $1.1 billion to help fund its network buildout. However, the company said last month that despite the fresh funds, which will carry it through the end of 2012, it may have to raise substantial amounts of cash after that.

Leap appears to be replacing its deal with LightSquared for LTE with its new one with Clearwire. In March 2011 Leap announced an LTE roaming deal with LightSquared that would allow Leap to supplement its LTE coverage by roaming on LightSquared's planned network. However, LightSquared's planned buildout has become stuck in worries of the interference its planned network could cause to GPS receivers.

[503ducati]

From January 5th 2011

Phoenix, Arizona

[cricket101]

damn..them sum nice speeds!! they really need to hurry with the build out of the network

[503ducati]

damn..them sum nice speeds!! they really need to hurry with the build out of the network

It should be a nice compliment to Sprint's LTE which looks like will have a solid number of markets launched by then.

- http://s4gru.com/index.php?/topic/21...-running-list/

[Morphling27]

503ducati,

I remember when that was announced for Phoenix. I was on Sprint at the time... too bad they never even got wimax launched in one of the biggest cities in the nation.

[503ducati]

503ducati,

I remember when that was announced for Phoenix. I was on Sprint at the time... too bad they never even got wimax launched in one of the biggest cities in the nation.

I agree, your market is 4.2million(14th) vs 2.2million(23rd) here. I wonder how they determine the number of wireless users or how many wireless broadband users per market. Clearwire will be able to offer something supplemental to 3G/4G networks in metro areas at a good price for their wholesale customers.

[freibrauer]

WIiMax failed because LTE was clearly superior and vedors will support LTE more so it made sense to go LTE. Sprint wont stop LTE deployment. Still $50 million while a nice source of revenue is a drop in the bucket to what CLWR will need per year. It doesn't make CLWR anymore independent or viable really.

Sent from my LG-US670 using HowardForums

[503ducati]

WIiMax failed because LTE was clearly superior and vedors will support LTE more so it made sense to go LTE. Sprint wont stop LTE deployment. Still $50 million while a nice source of revenue is a drop in the bucket to what CLWR will need per year. It doesn't make CLWR anymore independent or viable really.

Sent from my LG-US670 using HowardForums

Make no mistake signal propagation(reception) will not be any better with LTE vs WiMAX, that has nothing to do with platform but rather the frequency(2.5-2.6GHz).

[NGeorge]

Make no mistake signal propagation(reception) will not be any better with LTE vs WiMAX, that has nothing to do with platform but rather the frequency(2.5-2.6GHz).

Well it CAN make a good bit of difference if one air interface/technology at that wavelength is any better at decoding at a lower signal strength than another. e.g. a CDMA voice signal at 1900 generally stays listenable until it hits about -103 before cutting out rapidly and dropping, whereas a TDMA-based GSM signal starts losing timeslots around -99 (you notice words dropping) until you get to around -102 and it becomes completely unlistenable.

I know WiMax and LTE are very similar, but doesn't LTE have a *slight* edge in decoding and MIMO ability?

--Nat

[503ducati]

Well it CAN make a good bit of difference if one air interface/technology at that wavelength is any better at decoding at a lower signal strength than another. e.g. a CDMA voice signal at 1900 generally stays listenable until it hits about -103 before cutting out rapidly and dropping, whereas a TDMA-based GSM signal starts losing timeslots around -99 (you notice words dropping) until you get to around -102 and it becomes completely unlistenable.

I know WiMax and LTE are very similar, but doesn't LTE have a *slight* edge in decoding and MIMO ability?

--Nat

I've read regarding LTE being more "efficient" so to speak than WiMAX no one is doubting that. I'm no engineer. The misconception is that WiMAX is the reason as to why Sprint/Clearwire 4G reception is poor. In other words some seem to think, for instance, Verizon 4G performs so much better simply because it's LTE or they have better "backhaul".

[503ducati]

Moving forward, I believe Clearwire will be able to offer excellent wholesale supplementary 4G for Sprint, Cricket, whomever. They will be able to utilize their very large spectrum holdings in big urban areas.

LightSquared, Dish Network, Clearwire are all vying for the wholesale "4G" market as the legacy operators are running out of spectrum quicker than ever as more wireless users are moving onto "4G".

Verizon currently only has 4.7 million users on LTE. Clearwire/Sprint has 10.4 Million users on WiMAX. Verizon already has been prepping for future spectrum needs.

[cricket101]

It should be a nice compliment to Sprint's LTE which looks like will have a solid number of markets launched by then.

- http://s4gru.com/index.php?/topic/21...-running-list/

all those market and NO Pittsburgh PA??? we have Wimax but im 20 miles away from the city so i dont get coverage at all

[bigsnake49]

Well it CAN make a good bit of difference if one air interface/technology at that wavelength is any better at decoding at a lower signal strength than another. e.g. a CDMA voice signal at 1900 generally stays listenable until it hits about -103 before cutting out rapidly and dropping, whereas a TDMA-based GSM signal starts losing timeslots around -99 (you notice words dropping) until you get to around -102 and it becomes completely unlistenable.

I know WiMax and LTE are very similar, but doesn't LTE have a *slight* edge in decoding and MIMO ability?

--Nat

Yes, the deployed LTE has an edge over the deployed WiMax but only because Clearwire is still running Wimax 1.0. Later versions of Wimax (1.5 and 2.0) erase the LTE lead. The market has spoken and Clearwire does not want to be a Wimax island so they're moving to LTE Advanced in 2013.

[bigsnake49]

Moving forward, I believe Clearwire will be able to offer excellent wholesale supplementary 4G for Sprint, Cricket, whomever. They will be able to utilize their very large spectrum holdings in big urban areas.

LightSquared, Dish Network, Clearwire are all vying for the wholesale "4G" market as the legacy operators are running out of spectrum quicker than ever as more wireless users are moving onto "4G".

Verizon currently only has 4.7 million users on LTE. Clearwire/Sprint has 10.4 Million users on WiMAX. Verizon already has been prepping for future spectrum needs.

Dish won't have anything going until it's waiver request is processed. No decision is expected until the end of this year. It will take at least a year or more likely two until they're really a player, even if they piggyback on Sprint's network. Lightsquared is for all intents and purposes dead. Clearwire is barely surviving and only because Sprint tosses them a line once in a while. The wholesale business is not going to survive as a business model unless the big 4 run out of capacity. I don't see that happening for a little while.