Various geeks and entrepreneurs have been trying to exploit the opportunities created by the big bad cell phone oligopolies that have been ripping people blind. All of the various claimed solutions are facing their own problems.
One solution is the all-you-can eat cellphone carriers represented by MetroPCS and the Cricket service of Leap Wireless. While these services have been gaining market share — particularly among teens and twentysomethings — in February the four major carriers rolled out their own flat rate plans. The effect of the $100/month (with roaming plans) on $40/month (no roaming) plans is yet to be seen.
Another proposed solution was the idea of free or cheap municipal Wi-Fi. But with the failure of Earthlink’s efforts and most city-sponsored plans, this appears to be a dead end.
This week, Sprint reopened its planned WiMax partnership with Clearwire, combining their respective properties into a joint venture that’s also funded by Google, Intel and a passle of cable companies. To me, the deal suggest that WiMax as technology is done, finish, finito — stick a fork in it.
While Forbes optimistically proclaims this the salvation of WiMax, IDG asks whether the coalition will “save” WiMax? I think not. Just a few reasons:
- There have always been problems with the fundamental WiMAX business model, problems not solved by this new deal.
- Quite a few analysts are skeptical that this partnership will succeed.
- Not all the partners are fully committed; one analyst noted that Google is “wading, not jumping” into WiMax with a one-time $500m investment.
- Analysts writing for Barron’s wonder whether after spinning off WiMax, Sprint will shift to the same 4G strategy as every other major carrier in the world: LTE.
My reasoning is this: if this is the best the world can muster for a WiMax carrier, where’s the economies of scale? The upside? The growth? People made fun of CDMA, but it had half of the US and Canada, all of Korea, and a significant presence in Japan and Latin America. If WiBro and WiMax get reconciled (as claimed), WiMax will perhaps get 25% of the US, all of Korea and less than 10% of all other major world markets. Despite Intel’s claims, no one is going to bundle WiMax support into laptops for such a niche solution.
If WiMax dies, the big loser will be Intel, which has pumped billions into Clearwire and other WiMax efforts.