Sprint to use Clearwire's TDD-LTE to augment its own LTE network

The squabbles, break ups and make ups between Sprint and Clearwire have become worthy of a prime time soap opera.  Sprint has been reselling Clearwire’s mobile WiMAX network (CLEAR) and offering its own branded “4G” smart phones along with a Samsung tablet that works on CLEAR and Sprint’s 3G network.  But earlier this month, Sprint announced it wouldn’t be supporting new WiMAX smartphones at the end of 2012.   And Clearwire can’t generate enough cash or attract funding to build out the rest of its WiMAX footprint.  Instead, the company has opted for a TDD-LTE buildout.  Clearwire provided China Mobile considerable assistance with its TDD-LTE network at last year’s Shanghai World Expo.

Was Sprint shooting itself in the foot?  After all, it owns 49.7% of Clearwire!  What happens to all the orphaned WiMAX customers next year?

Evidently the two companies are still joined at the hip.  Sprint will use Clearwire’s TDD-LTE service to add capacity to its own LTE network, slated to launch early next year, said Sprint’s Bob Azzi during his keynote address at 4G World on October 26th.  “We’re taking advantage of the depth of Clearwire’s spectrum for hotspots and offload,” Azzi said, saying it will serve as an “offload layer in the hottest of hotspots.”   Sprint’s LTE network will have a “much broader footprint” than Clearwire’s WiMAX network, Azzi said.

Apparently, Sprint and Clearwire are working with vendors on chips and devices compatible with their respective FDD-LTE and TD-LTE networks. Smartphones will have to be compatible with both technologies to take advantage of the capacity boost from Clearwire’s network.  They’ll also have to work on Sprint’s 3G network so that customers can get Internet access in places where LTE coverage is not available.

On October 7th when Sprint announced its “Network Vision,” the company said that it would phase out its use of Clearwire’s WiMAX service next year in favor of its own LTE built network in 2012.  Sprint’s LTE network is expected to cover 250 million people by the end of 2013 and cost upwards of $4B to build out.  That decision was a blow to Clearwire, which depends on Sprint for the bulk of its wholesale revenue.  Furthermore, it seems mobile WiMAX will NOT be included in the new multi-mode LTE devices, which also must support 3G (EVDO/CDMA) and WiFi.  Hence, the mobile WiMAX eco-system will be shrinking next year and likely more so in the future.

Sprint’s decision to abandon WiMAX in favor of LTE was also noted in an October 26th 4G World talk by Tom Jasny, vice president of wireless and broadband network systems at Samsung.  Jasny said that the aggressive deployment of LTE in the United States by MetroPCS, Verizon Wireless, AT&T and Sprint has made it the hottest smartphone market in the world.  “Smartphone adoption has grown quickly in North America at rates exceeding the rest of the world,” he said, citing the 42 percent of all cell phone users in America that own a smartphone.   Of course, along with smartphone comes data traffic. Though LTE provides a clear advantage over 3G in terms of speeds and spectral efficiency, vendors like Samsung are already starting to talk about the need to increase capacity on the next-generation mobile broadband networks. Jasny said Samsung is stepping up to the challenge with new architectures that use a combination of macrocells and small cells.  Samsung is also providing network equipment for Sprint and C Spire Wireless’ respective LTE deployments and partnered with MetroPCS to bring the first LTE smartphone to the U.S. market, the Galaxy Indulge.

Sprint’s Mr. Azzi did not discuss timing or funding for Clearwire’s TDD-LTE network. Clearwire needs $600 million to deploy the service, which will serve as an overlay to parts of its WiMAX network. Sprint also needs to raise money before it can deploy its own LTE network and has not said whether it will help pay for Clearwire’s buildout.   There are rampant rumors that Sprint Nextel Corp. and Clearwire Corp. are near an agreement to extend their existing network- sharing agreement for three to five years.  The current pact expires at the end of 2012.  Clearwire has said it needs about $1 billion to finance its operations and transition its mobile WiMAX network to LTE,  which must include migrating its existing WiMAX customers onto that “4G” wireless network.

“Assuming that Sprint and Clearwire sign a new agreement, it providesClearwire with an ongoing source of revenue,” Michael Nelson, an analyst at Mizuho Securities USA Inc., said in an interview with Bloomberg. “This would likely help them get funding, because it would provide increased visibility into revenue- getting opportunitiesand reduce the risk profile.”

Yet with all these back and forth machinations, it is puzzling that Sprint isn’t more supportive of Clearwire who will have great difficulty wholesaling its future LTE network to other “4G” providers.   The saga continues.  Stay tuned for more updates!

Related Aricle: 

No Surprise: Clearwire to shift from WiMAX to LTE – But Who WIll Fund It?

http://community.comsoc.org/blogs/ajwdct/no-surprise-clearwire-shift-wimax-lte-who-will-fund-it

 

0 thoughts on “Sprint to use Clearwire's TDD-LTE to augment its own LTE network

  1. Alan, thanks for posting this informative piece.

    I wonder if we will see China Mobile enter into the picture, as a partner, investor or outright owner of one or both of these entities. Clearwire and China Mobile already announced a collaborative effort last month.

    “China Mobile and Clearwire Announce Collaboration on TD-LTE Devices – Is an investment from the world’s largest mobile operator next?”

    The other thing that strikes me is the statement about how the U.S. is the place to be for Smart Phones. It wasn’t too long ago that people were critical of the U.S. because of the lack of adoption of text and multimedia mobile messaging and how we were lagging behind.

    I suppose this just points to the ebb and flow of technology, investment cycles and consumer adoption (end associated utility of an application for a given market segment). One conclusion is that we need to be a bit cautious about rankings of broadband and adoption, as one day’s cutting edge technology becomes tomorrow’s legacy network.

  2. Sprint abandoning WiMAX is terrible news for current subscribers!

    Last month, I bought a top of the line HTC EVO 4G smart phone from Sprint. Will that phone go dark next year when Sprint abandons WiMAX? Yeah, I know it falls back to 3G, but that’s not what I was paying for! Will I be able to make a video call/ chat with an LTE subscriber? Will Sprint allow me to trade in the EVO 4G for a new LTE smart phone?

  3. Hi, John Votava from Sprint here. Sprint will not be abandoning it’s WiMAX customers at the end of 2012. To clarify, Sprint will continue to sell WiMAX devices with two year contracts through 2012 and support those devices through the life of the contract. WiMAX devices will operate on the CDMA network and get the benefits of Network Vision associated with Sprint’s 3G service, but they will not operate on Sprint’s LTE network. WiMAX customers should continue to get the great 4G speeds and customer experience they’ve been enjoying since Sprint launched the country’s first 4G service from a national carrier in 2008.

    1. John, Thx very much for your reply comment. I detect a contradction in what you wrote: “WiMAX devices will operate on the CDMA network and get the benefits of Network Vision associated with Sprint’s 3G service, but they will not operate on Sprint’s LTE network. WiMAX customers should continue to get the great 4G speeds”

      WiMAX is an all IP- OFDMA network, while 3G-EVFO data is an overlay on top of CDMA -a TDM like network. They are incompatible! Morevover, you can’t have 3G service and get 4G speeds!

      Reading between the lines and twice hearing IEEE ComSoc presentations on Sprint Vision, I believe that the Multi-mode base stations used in Network Vision, will support 3G, WiMAX and LTE – probably at different frequencies. Voice for 3G and WiMAX will be carried over the CDMA network. Eventually, you will carry Voice over LTE as that is the industry trend.

      One problem with this scenario is that video calls/chats or any other real time low latency application will have huge problems when the device end points are on different networks. WiMAX- LTE interoperability and handoff will also be a problem for real time, low latency applications. The prtocol conversion/ mapping between the two will result in very poor quality and possibly loss of lip sync on video calls. Hence, a 4G EVO video chat will likely not work well or at all with an LTE video chat capable smart phone.

      Please correct or ammend what I’ve written here.

      Thanks, alan

    2. There is something very wrong with what Sprint wrote above. How can WiMAX devices get the benefit of 3G service, it it is a 4G service? How do you get 4G speeds from a 3G service? If WiMAX devices operate on the CDMA network, then they must fall back to CDMA/EVDO mode (i.e. WiMAX mode is muted) and get 3G speeds- not 4G speeds.

      Seems another explanation from Sprint is needed to clarify how WiMAX devices will be supported AFTER Sprint stops reselling CLEAR 4G-WiMAX!

  4. I think this was a long time coming. Clearwire has been edging away from WiMAX for the last year or two and towards an embrace of LTE, and looks like they’re finally doing it.

    You’re right that these are different network technologies, and so WiMAX handsets won’t work with the LTE networks (though they probably have multi-mode capability and are able to fall back to using Sprint’s 3G EV-DO/CDMA networks for voice and lower bandwidth data – that might be what the Sprint rep is alluding to). Going forward, the newer handsets will probably support LTE and 3G and Sprint/Clearwire probably have time to deal with the rollout of these new handsets to their subs and retire/refresh older handsets over the coming months/years while the new LTE networks get rolled out.

    Does that make sense?

    -Chari.

  5. Looks to me like they have in mind dual-radio devices that support both wimax and EV-DO. I agree with you that wimax and LTE are similar in that they both use ofdma, but the details are different enough that devices would need two radios anyway. Maybe one day, somebody will produce a chip that supports both wimax and LTE, but as far as I know, that doesn’t exist. Would be interested to hear about it if you know of one or hear about it.

    As for the use of the term 4G, that has been used in a marketing sense for years by the wimax folks, who were saying things like why wait for LTE? We have 4G here and now, with wimax

  6. Thanks Daniel & Chari

    The key question Sprint has not answered is will their new “Network Vision” base stations support 2.5GHz mobile WiMAX (which the devices which run on CLEAR 4G use) in ADDITION to LTE-FDD and 3G/EVDO/CDMA?

    There are several related questions for Sprint:

    -Where will Sprint get the estimated billions of $s to fund their Network Vision build out?
    -The company will have a huge cash flow problem with the Apple iPhone 4S as they have to pay Apple in advance of realizing revenue from sub’s 3 year contracts. How will they manage that?
    -And will they be able to maintain unlimited data plans for it on their 3G network?

    Again, you can’t get 4G speeds from a 3G network and WiMAX (all IP/OFDMA/ IEEE 802.16 MAC-PHYis incompatible with CDMA/EVDO infrastructure!

  7. Most Sprint 4G devices are dual mode, meaning they operate over 3G and 4G. They have separate radios embedded – a CDMA radio for 3G and a WiMAX radio for 4G. We will continue to offer 4G over WiMAX beyond 2012, as I said, with the great 4G speeds and customer experience they’ve been enjoying since Sprint launched the country’s first 4G service from a national carrier in 2008.

    Currently, Sprint’s Network Vision plans include 3G, (1X Advance for voice and EVDO for data) and LTE using our Sprint-owned spectrum at 800 and 1.9. Our WiMAX network will continue to be owned and operated by Clearwire. There are no plans for tri-mode chipsets in handsets (there may be a few hotspots initially) so we don’t anticipate significant hand-off issues between LTE and WiMAX.

    1. John, Thanks for your clarifying comment. The key point is that Srpint’s Network Vision network equipment will NOT support WiMAX and that you are reliant on Clearwire for that support.

      Readers were confusted when you wrote “WiMAX devices will operate on the CDMA network and get the benefits of Network Vision associated with Sprint’s 3G service.”

  8. The only way for Sprint to continue to sell CLEAR 4G WiMax after 2012 is for the current reselling agreement to be extended. As this article references a Bloomberg report:

    “Sprint Nextel Corp. and Clearwire Corp. are near an agreement to extend their existing network- sharing agreement for three to five years”

    However, that has not been confirmed or made public yet. What if that agreement is not reached? What will Sprint do with all the then obsolete WiMAX devices it’s sold?

    Bottom line: Sprint continues to rely on Clearwire to support its existing WiMAX devices and for TDD LTE to augment its FDD LTE network being built. But where will the money come from to finance this build out? Sprint’s debt rating was recently cut and the company hasn’t made a profit in over 4 years!

    1. Sprint claims they have a MOU with Clearwire to extend the WiMAX resale agreement forover. Let’s wait and see what happens.

      But who in the U.S. would now buy a 4G WiMAX smart phone or tablet?

  9. Great quotes on the Sprint- Clearwire flip flop, which corroborates & amplifies several points I made in the above article:
    http://www.chicagotribune.com/business/sns-rt-us-clearwire-analysistre7a14m3-20111102,0,1195686.story

    “Investors mistrust Sprint’s flip-flopping relationship with Clearwire, over which it does not exercise operational control despite its majority ownership.

    Sprint executives triggered a 32 percent drop in Clearwire’s stock on October 7 when they told an investor conference it would stop selling phones using Clearwire’s service at the end of 2012, and suggesting it could benefit from a Clearwire bankruptcy.

    http://www.chicagotribune.com/business/sns-rt-us-clearwire-analysistre7a14m3-20111102,0,1195686.story

    FLIP-FLOPPING

    To be sure, some investors saw Sprint’s announcement October 26 that it is working on a new agreement with Clearwire as an acknowledgment that it cannot afford to abandon Clearwire because it needs access to Clearwire’s bigger spectrum holdings to support its own high-speed upgrade.

    Yet another concern is that Sprint’s commitment to pay a minimum of $15.5 billion to Apple Inc to sell the iPhone over the next four years will hurt growth at Clearwire. Until now, Sprint’s fanciest phones use Clearwire’s network.

    “You’re dependent almost purely on Sprint, and in the short term at least, iPhone is going to be taking share away.” said another investment manager who said he sold Clearwire shares after Sprint’s comments on October 7. “I would take a risk on the bonds, but as an equity guy, it’s frightening.”

    He also pointed to Sprint’s tumultuous past with Clearwire, including a battle over the smaller company’s retail strategy. Clearwire’s revenue fell short for a few quarters while the pair haggled over wholesale pricing.

    “It’s disconcerting because, as much as Sprint is dependent on Clearwire, Clearwire is dependent on Sprint — a guy that has never had a good relationship with Clearwire,” said the second investment manager.

    Clearwire is trying to spread its eggs among more baskets. It has said it is in talks with “everybody” about selling capacity in dense markets where operators like No. 2 U.S. provider AT&T have struggled with reliability amid heavy data service use.”

    http://www.chicagotribune.com/business/sns-rt-us-clearwire-analysistre7a14m3-20111102,0,1195686.story

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