Cisco Delivers WiMax Wake-Up Call With Clearwire Deal; More Markets, More Opportunity?

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Now after the announcement last month of a multi-year deal between Cisco and
Clearwire, the waiting is over – and you have to think Cisco just delivered a
big wake-up call about WiMax to Silicon Valley and Wall Street in one big move.

What really made the deal big news was the inclusion of Cisco’s pledge to ship a
mobile WiMax end-user device before year’s end. The other part of the deal,
which involves Clearwire using Cisco gear in its core IP network, isn’t so
surprising — in any IP network of Clearwire’s size, you might be more surprised
not to find Cisco gear in the wiring closets.

But by pledging to develop end-user devices, Cisco is signaling to the rest of
the industry (and investors, if they are listening) that WiMax is more than a
curiousity. Cisco CEO John Chambers is famous for not wanting to get into new
businesses until they offer Cisco significantly large opportunities, usually in
the billion-dollar range. Is WiMax the next billion-dollar business for Cisco?
Thanks to the May 13 deal, that question is now more than hypothetical.

And now, with more Clearwire markets coming on line, Cisco’s planned device may
have a lot more potential users. As Clearwire officially launches its Atlanta
market June 16, the company is in the midst of some aggressive pricing
promotions, including a new unlimited-use home and mobile package for $55 per
month. The new prices, Clearwire said, will be available in all its "live"
markets, which include Portland, Atlanta and Las Vegas (which will "officially"
launch later this summer even though services are being sold already).

In a recent call following up on the company’s first-quarter earnings
announcement, Clearwire chief strategy officer Scott Richardson said that some
better-than-expected network performance was partially behind the idea of the
new "bundled" pricing plans.

The "Pick 2" unlimited plan promotions, for example, allow either a mobile and
home connection — or two mobile connections — for just $55 a month (regular
price $80/month), with download speeds of 6 Mbps. Such plans might be
interesting to users who want to deploy Clearwire’s Clear Spot Wi-Fi/WiMax
router, a $139.99 device that lets up to eight different Wi-Fi connections
piggyback off a WiMax service plan. The "unlimited" part of the plan, Richardson
said, is the part that other wireless data providers might have a hard time
matching.

"Our friends in the 3G space [with similar products] are already limiting
application use," Richardson said. "Providing open access is the strategy that’s
really important to us. I don’t think that’s the kind of thing the cellular guys
can really support."

PAUL KAPUSTKA is the editor and founder of SIDECUT REPORTS, which recently
released its "Clearwire NTK" research report (which stands for Clearwire — Need
To Know), priced at just $4.95. You can order the report directly by following
this
link.