Mobility and Wireless

What's in it for the tech, cable companies?

After the deal is finalized, Comcast, Time Warner and Bright House will enter into wholesale agreements to become official vendors of Clearwire's 4G WiMAX services. Additionally, the three television companies will become bundled providers of Sprint's 3G wireless voice services, which Sprint hopes will expand the reach of its network to millions of new customers.

Google, meanwhile, has agreed to develop new Internet services, advertising services and applications for all Clearwire WiMAX devices. In return, Clearwire will support Google's open source Android operating system on all of its WiMAX devices. And finally, Intel has agreed to work with manufacturers to install WiMAX chipsets into Intel-based laptops and mobile devices, and also to market Clearwire's WiMAX service in congruence with Intel's performance notebook PC brand.

Nemertes analyst Mike Jude says that securing these heavy-hitters as partners and investors was essential for the Clearwire venture to differentiate its WiMAX services from current 3G technologies such as HSPA. Because each of these companies has a strong reputation for delivering innovative and unique content and products, says Jude, they will play an important part in building WiMAX's brand as a relevant and important new technology.

"Just having a high-speed connection is OK, but if you need it to consume something that you want, then you have an incentive to actually pay for it," he says. "If Sprint-Clearwire could introduce WiMAX with some really serious content delivering applications that consumers want, then that would be a very good thing and would likely make the rollout successful."

Jude says that the cable companies in particular are eager to get into the wireless market and go toe-to-toe with telecom carriers Verizon and AT&T, which have each been aggressively promoting their FiOS and U-Verse services as alternatives to traditional cable television and Internet. A report issued earlier this year by researchers Information Gatekeepers projects that telcos will be able to match the total number of high-speed accesses offered by cable companies by 2011, thus giving the cable companies further motivation to up their wireless offerings.

"WiMAX provides a new market for cable companies that remains largely untapped," he says. "Although there are some trivial applications out there like wireless TV over cell phones, they suffer from bandwidth constraints and limited availability. Armed with high bandwidth and significant coverage, the cable operators would actually have a viable channel for the content that they can deliver."