Feeds

Sprint Nextel in Clearwire spectrum swap

Stepping up RBOC challenge

Top 5 reasons to deploy VMware with Tegile

Sprint Nextel and Clearwire are the biggest holders of 2.5GHz spectrum in the US and both are looking to build major WiMAX-class networks. But they are likely to steer clear of head-on competition, in order to accelerate their roll-outs and strengthen the potential of new broadband wireless services to shift the balance of power in US telecoms and provide a counterweight to the Bell operators, with a full wireless triple play.

The two operators are swapping spectrum, pointing to a mainly rural and suburban focus for Clearwire, enabling it to expand rapidly in areas of limited competition as it aims to create a national system for wholesale and roaming as well as end user access.

Meanwhile, Sprint Nextel will focus on larger population centers, under pressure to meet its FCC obligation to offer 2.5GHz service to 30m citizens by decade end. Creating a broadband wireless network will be key to Sprint’s desire to offer its own mobile and triple play-capable services, either directly or through key partners such as the cablecos. These will be essential to its bid to gain influence and market share at the expense of Verizon, AT&T and Cingular.

Similar alliances are arising elsewhere, such as Australia, where Unwired and Austar are exchanging spectrum in order to create an integrated national network that allows each operator to focus on its core markets and to grow more rapidly, and which deprives the incumbent of the ability to weaken its challengers with a divide and rule approach.

The structure of the swap suggests that Sprint Nextel - which has an obligation under the conditions of its merger to build a 2.5GHz network reaching at least 30 million Americans by the end of the decade – will focus initially on large and medium cities, while Clearwire will continue its expansion of the past year in rural and suburban areas. By dividing the spoils in this way, rather than competing head-on, the two largest holders of 2.5GHz – the main spectrum for WiMAX in the US – will be free to expand more rapidly and keep margins relatively high in the crucial early years.

The Sprint Nextel ambitions

The two companies have been engaged in unofficial talks since before the Sprint-Nextel merger plan was unveiled, regarding possible spectrum deals, and even the possibility of a full sharing of each other’s networks. The aim has been to avoid a situation where the two most viable builders of national broadband wireless services in the US tear each other apart, instead of creating a strong alternative to other broadband options and, in particular, the massive power of the Regional Bell operators and their cellular ventures. Sprint Nextel has made it very clear that it intends to be a counterweight to the Bellcos, an ambition bolstered by its far reaching alliance with the major cable providers, to bring mobile services to their bundles and allow them to take on the DSL giants in the market for fixed/mobile triple play services. The $71bn merger was not just about gaining scale by merging the companies’ cellular bases, but about transforming the nature of the business to become a broad-based, multiservice operator with a cornerstone role in the broadband, mobile triple play sector.

In this respect, the 2.5GHz spectrum is the lynchpin of the whole deal, because of its suitability for high bandwidth services and the fact that Sprint Nextel has access to 80 per cent of the population, far ahead of any comparable assets held by the Bellcos.

Security for virtualized datacentres

Next page: Clearwire’s moves

More from The Register

next story
TEEN RAMPAGE: Kids in iPhone 6 'Will it bend' YouTube 'prank'
iPhones bent in Norwich? As if the place wasn't weird enough
Consumers agree to give up first-born child for free Wi-Fi – survey
This Herod network's ace – but crap reception in bullrushes
Crouching tiger, FAST ASLEEP dragon: Smugglers can't shift iPhone 6s
China's grey market reports 'sluggish' sales of Apple mobe
Sea-Me-We 5 construction starts
New sub cable to go live 2016
New EU digi-commish struggles with concepts of net neutrality
Oettinger all about the infrastructure – but not big on substance
PEAK IPV4? Global IPv6 traffic is growing, DDoS dying, says Akamai
First time the cache network has seen drop in use of 32-bit-wide IP addresses
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.