The US$3.2 billion raised by a consortium of US companies this week to build a national WiMAX network – known as Clearwire but majority owned by Sprint – may not be anywhere near enough to cover total deployment costs, according to analysts quoted in an Unstrung report. The report cites analysts outlining how it could take US$12 billion, including backhaul costs, to fully deploy mobile WiMAX in 50 US markets. Such statements appear to be supported by Citigroup, which yesterday downgraded Clearwire’s stock to a ‘Sell’, citing network costs, coverage, and competition as issues for the venture.
Previous Unstrung reports this week have outlined how the new venture aims to cover between 120 to 140 million people in the US by the end of 2010 using Sprint’s 2.5GHz nationwide footprint. The backers behind the new Clearwire venture are also confident of stealing a march on rival technologies such as LTE. “LTE will be a good technology when it arrives, but I don’t see how they [can] deploy 3G-LTE before 2011,” Barry West, CTO of Sprint Nextel and president of the new Clearwire venture, told Unstrung. “They’re still working on the standard. Our standard was baked in 2005. By that logic, we should see LTE in 2011.” US mobile operator rival Verizon has said it plans to take LTE nationwide in 2010. AT&T is reportedly aiming for a 2011-2012 timeframe.