What sank the Clear brand: Sprint 4G smartphone success and the hybrid hotspot

From several reports leaking out Wednesday night it is becoming apparent that Clearwire’s days of having its own retail brand are at the very least numbered, if not quite yet at zero. While we are guessing there will be more real details (and perhaps some more executive departures) discussed at both the upcoming Sprint earnings call on Feb. 10 and the Clearwire call on Feb. 17, the switch to a wholesale-first strategy makes a lot of sense for Clearwire since it technically has already happened, when wholesale numbers surpassed Clear-brand retail customers during the third quarter of 2010.

While we’re going to wait to dissect the shift until after real confirmed details arise, we can take a quick look back at two developments that are most likely the chief reasons why the Clear brand strategy got submarined: The success of the Sprint 4G smartphone introductions and the introduction of mobile hotspots, especially Sprint’s hybrid 3G/4G Overdrive hotspot as well as the hotspot feature in the 4G phones.

Though Sprint and Clearwire had previously been fairly frank about not seeing any competition between brands, most of that talk occurred before this past summer’s introduction of the first real 4G smartphone, Sprint’s HTC EVO 4G. The buzz winner at CTIA translated into a sellout success at the retail level, clearly surprising Sprint and its supplier since the company ran out of EVOs to sell not long after the introduction.

When the Samsung Epic 4G followed with more smashing reviews and more robust sales, it became apparent that the WiMAX team had a winning entry in the smartphone marketplace — but it also meant that introducing a separate Clear-branded phone wouldn’t make much sense, especially if Sprint had to front Clearwire the money to help subsidize the devices. Had the WiMAX smartphones been slow to take off, an additional brand might have helped find more customers; but with a hit on its hands it’s hard to blame Sprint for wanting to put the focus behind the train that was already moving.

The introduction of the Sprint Overdrive 3G/4G hybrid hotspot last year was also a bit of a blow to the Clear brand — if you could get all the functionality of a Clear modem in a device that also gave you access to the Sprint 3G network, why would you choose anything else? Double down that question when you include the hotspot capability inside a flashy smartphone — like Sprint did with both the EVO and the Epic — and you have a cake-and-eat-it-too combination that made the Clear brand’s device lineup look a little flat.

What are the possible options ahead for Clear as a retail brand? It could morph into a prepaid-only outlet, taking the Rover Puck strategy and expanding it as something much different than the 4G offerings from Sprint itself. With store leases paid for and more than a million customers locked into two-year contracts it probably doesn’t make sense to shut Clear down completely. But it now looks pretty clear that the burgeoning wholesale business is going to become Clearwire’s main business, going forward.

About Paul Kapustka

Paul Kapustka is a longtime journalist who has spent more than two decades covering the information technology business, Paul most recently has been focusing on mobility and how it has changed the computing and collaborative landscape. His newest project outside Mobile Enterprise 360 is a research and analysis operation called WiFi Journal. He is also editor in chief of Mobile Sports Report, which covers the intersection of mobile technology and sports business. Paul is also the founder of Sidecut Reports, a research firm that covered the emergence of 4G technology in the cellular marketplace.


  1. While there is credibility in this perspective, the greatest threat was the lack of leadership and forethought from the beginning.

    No city was ever fully built out so that while Clearwire could put lots of dots on the map – customers were left coverageless as they drove across town. Adopters speedily became abandoners when they realized they’d been sold hype.

  2. In driving and measuring a number of ClearWire cities, it is VERY clear that the cell site density is much lower than required for a real 4G service. There are numerous cases of cell edge performance and marginal signal levels.

    I think you will find that Sprint – the first to deploy “4G” is now the slowest cellular data offering among ATT, TMobile and Verizon.

    ClearWire clearly pursued a business model of a low density deployment in order to the maximum number of cities covered with the capital they had. Coverage first – then capacity.

    To have a competitive product going forward, ClearWire (and Sprint) will have to invest in a much denser cell site deployment on their existing footprint.

  3. Frankly, I think ClearWire’s sustainability as an operating business (as opposed to a spectrum farm) is at risk.

    At the frequencies they are deployed, they need more base stations per square mile in any case .. and now .. they need more.

    And the version of WiMax they have deployed substantially underperforms LTE. Even more so compared to an LTE deployment at 700 MHz (as ATT and Verizon are doing).

    Not clear how WiMax really survives under the combined pressure of niche technology, the long term domination of LTE and the interesting mid-term success of HSPA+.

    And without WiMax and capital – ClearWire’s only real asset is legacy customers in small rural markets and its spectrum.

  4. Ken, is it possible to see the numbers and statistics you are using to back up your claims? Other Novarum fans on this site have referenced a report with a series of drive tests that seem to be a bit old in the tooth, measuring Clearwire’s pre-WiMAX deployments and none from the past two years. Anything more recent that you can share with us all?

    It’s one reason why I have done a lot of the ad hoc measurement posts here — I’d rather go out and report what is happening as opposed to pontificating about theoretical possibilities. If you’ve done drives of Clearwire cities, are your findings different than the coverage maps the company provides online? Where they explicitly locate towers? That would be interesting data.

    While I will agree that industry momentum seems to be pointing toward greater deployment of LTE in the future, I also don’t quite understand how you arrive at the determination that the Clearwire version of WiMAX is “substantially underperforming” LTE. Is there any technical proof to this claim?

    Even Verizon’s Dick Lynch has said the two technologies are basically the same; I get that 700 MHz may be better than 2.5 GHz at in-building coverage but from what I have heard 700 MHz has its complications too — interference with other nearby towers, cable TV box interference — all questions yet to be answered. Since Verizon’s LTE network has only been live for two months I find it a stretch to believe that someone can ascertain it immediately superior to other offerings. Again, numbers would help here.

    Whether WiMAX survives is certainly a topic that will keep followers like us talking for years to come… but right now I see more than a million WiMAX devices in use in the U.S. today, with HSPA+ and LTE devices still mainly existing only on PowerPoint slides. So… how are we measuring “mid-term success” and viability going forward? On guesses? I’d like to see more numbers on the scoreboard before saying the game is over, one way or another.

  5. Valerie — curious to know what you would have done differently re: the buildout strategy if you were in Clearwire’s position. While Clearwire may have business problems, I would guess that continual metro coverage in any region is probably low on any crisis list. And they’ve been more upfront than any other carrier I’ve seen with their coverage maps; hard for me to see any credibility in playing the “hype” card here when the company is actually doing the opposite, trying its best to tell potential customers where service is and where it ain’t.

    Would also like to see some numbers proving your “adopters to abandoners” claim. So far there haven’t been any reports of massive churn during the quarterly reports (remember Clearwire is a public company so such statistics are generally revealed if they are actually happening).

  6. I have a question. Is there a chance that the reduced footprint is based on the first generation equipment and that the new 2×2 802.16m on the equipment that Clearwire deployed for its first generation WiMax will be filled in with new equipment based on 802.16m?

    Also, why does’t Clearwire offer an outdoor based unit for fixed locations that can be installed with a truck roll? Since their first generation equipment was fixed anyway, doesn’t this increase their coverage zone significantly?

  7. (UPDATE: fixed error in comment. See below.) Rory, the network run by the “new” Clearwire, meaning every deployment since the merger of Sprint/Clearwire assets, is completely based on 802.16m 802.16e. It is possible that some old towers were used but according to interviews and research Clearwire has built many more tower sites since then; and in almost all of the bigger markets they didn’t have prior services there so it was all greenfield to Clearwire coming in.

    On the fixed unit — an interesting question — don’t want to answer for Clearwire but my guess is it was done purposely to eliminate the possibility and cost of a truck roll.

  8. Thanks Paul. I thought the technology that they deployed was 802.16d.

    I don’t know enough about the footprint size of their deployments to say whether truck rolls were the answer financially. I know in my analysis of WISPs that a truck roll is cheaper than paying for vertical assets in a fixed radio environment. That may change if the client radio costs $300 or more and the company is eating that Capex for a year depending on intstallation fees and rates. however, it would greatly increase their footprint and client base. Contract Dish Installers since they already have the experience and sell it as a package deal.

  9. Actually I think I misstated — the tech they used was 802.16e, the first true “mobile” version of the standard. 802.16m, if I have my permutations correct, is the “next” version that supports faster download speeds, etc. Don’t believe there is any actual commercial “M” equipment yet. And just to confuse things further I think there is an interim upgrade in the works as well.

    The bottom line for this thread is that their current network supports full mobile connectivity, while the pre-WiMAX one did not. Sorry for the confusion.

    And on the fixed platform — it sounds like a solid idea, the way you have it spec’d out. I agree with you, think there are opportunities there that haven’t been tapped.

  10. I’m looking at an 802.16m chipset now but I don’t think it’s in any current products that I’m aware of. It should make a huge difference in performance, especially if it’s deployed with new technologies in antenna technologies such as beam-forming.