Is Clearwire (CLWR) at risk of losing its early-mover advantage in the 4G wireless market? It’s possible.
Verizon Wireless (VZ) gave the Mobile World Congress in Barcelona a look at its 4G buildout plans today. The telco plans to offer 4G wireless service — using a technology called LTE — in two cities by the end of 2009. By the end of next year, it plans to reach 25 to 30 markets.
Verizon didn’t elaborate on how many people those markets could include. But assuming Verizon is targeting the biggest 25 to 30 markets, that could be around 100 million people.
How does that compare to Clearwire? Last year, Clearwire — which merged its 4G business with Sprint Nextel’s late last year — said it planned to offer service to 60 million to 80 million people by the end of 2009 and 120 million to 140 million by the end of 2010. So by the end of 2010, it could potentially reach 20% to 40% more people than Verizon.
But a Clearwire rep tells us that the company will revise its expansion plans during its earnings presentation next month. The company wouldn’t comment further (for obvious reasons). But given Sprint’s history of delaying its 4G buildout — and the tough capital markets, which could make financing more difficult — it’s reasonable to assume Clearwire could decide to grow slower.
If so, that vaporizes three years of hot air during which Sprint has been talking up their first-mover advantage.
Sprint vowed in 2006 to build out its WiMax network to reach 100 million people by the end of 2008, but it’s currently in just one city — Baltimore. Combined with Clearwire’s network in Portland, the company is reaching less than 10 million people with 4G coverage.
There’s a lot of factors that could slow down either rollout or favour either company — money, cool devices, natural disaster, etc. But from here, it looks like Clearwire has lost much of its first-mover advantage. And now it — and its partners, including Sprint, Google (GOOG), Intel (INTC) and the cable industry — might have to convince people to sign up for their 4G service with a formidable competitor in town — Verizon Wireless, the biggest U.S. wireless carrier.
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