Is Clearwire set to abandon retail for wholesale?

10 Feb 2011

US WiMAX provider Clearwire is poised to abandon its contentious retail strategy, to concentrate on its wholesale operations, Reuters reports, citing two people familiar with the matter. It is believed that Clearwire hopes to conserve cash to plough into the development of its high-speed network. If the report proves to be true, the shift in strategy represents a victory for Sprint Nextel, Clearwire’s non-controlling, majority shareholder. In the past Sprint has openly objected to Clearwire’s retail strategy, because it is too expensive to maintain, and involves the two companies directly competing with one another for retail customers. Sprint is eager for Clearwire to cease competing in the retail market and focus on building out its network instead.

According to TeleGeography’s GlobalComms Database, the wholesale part of Clearwire’s operation is key to its current success; at the end of September 2010 Clearwire’s network played host to 2.84 million subscribers, of which just 1.01 million were retail users while 1.8 million were wholesale users, of which the vast majority are assumed to be Sprint Nextel customers. A representative for Clearwire declined to comment on the speculation, saying that the operator would provide its investors with an update on its plans when it reports its quarterly earnings on 17 February 2011.