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Sprint Nextel in Clearwire spectrum swap

Stepping up RBOC challenge

The smart choice: opportunity from uncertainty

Both Sprint-Nextel and Clearwire have sufficient spectrum to create their own networks, but there is a strong logic to a combined effort that would wrongfoot the Bells and create a truly nationwide network in a shorter timeframe than either entity – Sprint distracted by merger and EV-DO migration, Clearwire by building the business – could achieve alone. This could lead, regulator willing, to a pooling of spectrum assets or a major roaming agreement, going beyond the current apparent strategy to stay out of each other’s core markets.

Australia

This more cautious initial approach is still worrisome for the incumbents though, and mirrors efforts in other countries to maximize the potential of broadband wireless to shift the telecoms balance of power. A good example is Australia, where Intel-backed start-up Unwired Australia has been aggressive about the superiority of WiMAX-ready technologies over 3G as a mobile broadband platform, and its resulting ability to challenge incumbent telco Telstra.

"HSDPA/3G is an underpowered technology which will not meet the needs of people looking for a broadband equivalent wireless service," said chief technical officer Eric Hamilton in November, when Telstra announced plans to move both its CDMA and GSM networks to HSDPA. Unwired uses the Navini Ripwave mobile broadband technology, which will be migrated to support 802.16e in about a year’s time.

To boost its challenge, Unwired last year announced a spectrum swap with Austar, which allowed the former to focus mainly on urban markets and the latter on rural and suburban, with a comprehensive roaming deal to connect both systems. Like the Clearwire agreement, this should lead to the more rapid creation of a national service based on WiMAX-class technology, and remove at least one competitor from the scene.

Under the agreement, Austar will trade a portion of its 2.3GHz license to Unwired, in return for part of Unwired’s 3.5GHz license, and the license boundaries will be redrawn with new licenses issued. As a result, Austar will hold 2.3GHz and 3.5GHz licences in areas that roughly align with its current subscription television market in regional Australia, while Unwired will hold the 2.3GHz and 3.5GHz licences for the majority of metropolitan Australia.

Unwired chairman Peter Shore said: “The beauty of building WiMAX-compliant networks is interoperability. As the networks are rolled out, Unwired would be able to sell a national service to all regions where Austar builds its network, in addition to its own city network and services, enabling Unwired customers to roam seamlessly from city to country and vice versa.”

The deal will create a national service and a viable challenge to incumbent telco Telstra. Wireless is expected to grow at three times the rate of broadband overall in Australia in 2005-6 and to account for over 10 per cent of broadband lines by 2008, the highest in any developed economy. Austar’s equipment supplier has not been revealed.

Copyright © 2006, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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