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AT&T (NYSE: T) Phone Company is once again challenging the imminent merger of Sprint Nextel (NYSE: S) with Clearwire (NYSE: CLWR), whose aim is to merge both companies’ WiMax assets in order to create a nationwide broadband wireless network.

This merger would be huge for Wimax, estimating a deal worth 14. 5 billion dollars, and is promising to be a huge success. Just ask Comcast (NASDAQ:CMCSA), Time Warner (NYSE:TWX), Intel (NASDAQ:INTC), and Google (NASDAQ:GOOG), all companies who are currently backing this magnanimous merger.

This union would be a grave threat to AT&T’s future success and longevity as a company, and therefore they are claiming that Sprint and Clearwire are “failing to make the required showings necessary for the commission’s review.” They are hoping that this new claim against Wimax would prohibit the FCC from approving its launch.

AT&T clearly understands the importance of mass mergers, seeing as how the company exists today solely because of a mergence between their company and Bellsouth. This alliance has allowed AT&T to grow and reach profound heights in profit margins and overall global accessibility. The same could all too easily occur as a result of the coalition between Sprint and Clearwire, an outcome that obviously leaves AT&T worried. 

And AT&T has more than one reason to be nervous about the Wimax wireless network. AT&T is currently working on their own 3G wireless technology, but it is still light years away from the technology currently being deployed by the Sprint and Clearwire union. 

With advanced technologies and unparalleled support from large corporations such as Intel and Google, it is no surprise why AT&T is scared about its ineludible launch. 

Disclosure: none

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This article has 37 comments:

  •  
    While I am long CLWR and agree with most of these points to an extent, I don't think AT&T's viability is at stake. Oh, and credibility would be enhanced by properly stating that the next generation is a 4G network. That said, CLWR is a strong buy at the current price.
    2008 Jul 31 09:10 AM | Link | Reply
  •  
    It's all about scalability & that's where if I was betting on WiMax I'd be nervous. Every carrier in the country is betting on LTE (as well as every major vendor; i.e.-Lucent, Nortel, etc.) while only one is going with WiMax. China & India are also going LTE (commonly known as the fastest growing economies in the world as well as the most populous) so that doesn't bode well either. Just my 2 cents....
    2008 Jul 31 10:04 AM | Link | Reply
  •  
    Word choice: "magnanimous". "mergence". "ineludible". "profound heights".

    Are these the words that belong in a business article or back at the creative writing lab?
    2008 Jul 31 10:19 AM | Link | Reply
  •  
    scalability is important, but getting to the dance 2 years before anyone else is huge!
    2008 Jul 31 10:56 AM | Link | Reply
  •  
    Hey Geddy, get your facts straight. Here are the facts about WiMax:

    1) Over 130 countries are deploying or have deployed WiMax. LTE is not even out of the standards review yet.

    2) China & India have already deployed WiMax

    3) There are over 400 companies working on WiMax products and services including Samsung, Motorola, Nokia, Intel, Google and many, many others.

    WiMax has at least a 3 year time-to-market advantage......but what many still do not understand is that this will be a complete and fundamental shift in the way wireless is sold. The Sprint-Clearwire model is a completely open system.....it won't be a Sprint device, it will be a GE, Samsung, Intel, Dell, Acer, Microsoft, Apple, Pioneer, Ford, Chevy, Honda, Bayliner, etc, etc DEVICE!!! Sprint-Clearwire becomes the ARMS dealer......

    AT&T & Verizon fear this FACT the most and want to distract people from WiMax at all costs......they want a CLOSED system that they can control and monopolize....
    2008 Jul 31 12:45 PM | Link | Reply
  •  
    I just wish there was a money earning WiMAX network somewhere in the world before all this hoopla. Coming to think of it, I just wish there was a money earning Wireless Data network anywhere in the world (I don't care if it is 2G or nG). I am a wireless engineer and never heard anyone make a single dime on wireless data (that includes WiBRO - Korean WiMAX)
    2008 Jul 31 01:02 PM | Link | Reply
  •  
    Thank you Monrio. The big words used in the above article to little to clarify the writer's point. But I must object to your suggesting that these types of words belong in a creative writing lab. They do not! Any good writer knows that using a 5 cent word rather than a 25 cent word will increase comprehension to ALL audiences - not just those audiences who have had, well, perhaps too much vocabulary training! The ol' KISS saying (Keep It Simpe Stupid) is never more apt when writing.
    2008 Jul 31 01:53 PM | Link | Reply
  •  
    Let's get this straight folks, WiMax has NOT been deployed on a national basis by anyone. Yes, many countries (albeit a COMPLETELY different spectrum) have deployed WiMax in some fashion but again, NOT on the scale Clearwire is attempting. You will also find (do a simple search on the internet) that WiMax standards vary widely & not one single standard has been out in front. China & India (again, do a simple internet search) WILL deploy LTE as their national standard & NOT WiMax. And for some opinion you have that WiMax has a 3yr head start, it hasn't even launched in any market yet while the latest word is that Verizon Wireless will already be testing it's first site cluster on LTE later this year. Once that's tested fine, it's just a matter of time before they flood the market with it. Sprint has YET to match the EVDO Rev. A coverage of Verizon Wireless or AT&T so you think they'll do any better with WiMax? Highly doubtful...but you keep on dreaming!
    2008 Jul 31 09:19 PM | Link | Reply
  •  
    Geddy – Stop drinking the cool aid from AT&T! WiMax is coming and you will be at the bus stop waiting for a ride!
    2008 Jul 31 11:52 PM | Link | Reply
  •  
    Actually I'm a Verizon Wireless customer & you obviously work for either "Sprextel" or Clearwire...good luck to you my friend & hopefully there's still jobs left in telecommunications for you when Clearwire folds!
    2008 Aug 01 10:37 AM | Link | Reply
  •  
    Geddy,

    You mention Sprint dosnt have the EVDO Rev A coverage of Verison or ATT in one of your comments. I wasnt aware ATT had a CDMA network?
    2008 Aug 01 11:38 AM | Link | Reply
  •  
    Geddy-you yourself don't have it strait. AT&T does not have a EVDO Rev.A network, and the data network they do have deployed is 5x slower than EVDO Rev.A. Verizon's EVDO Rev. A coverage is not as large as Sprint Nextel's EVDO Rev.A coverage. They are still playing catch up, as Sprint Nextel was the first to launch EVDO Rev.A on its network.

    As for your comment about WiMAX not deploying on a national basis by a major carrier, what do you think the article is about? The WiMAX network by Sprint and Clearwire will be a national network. They are atcually building it out across the country, and not in test cluster's like you say Verizon is doing.

    And when Verizon finally launches LTE, between 2010 and 2015, assuming they get through standards in two years, what devices will they launch, because a network is useless when there are no devices.

    Oh and correction. Stop drinking the cool aid from Verizon then! You obviously work for Verizon. How else would you be claiming that they are testing in clusters. By the way, the ClearWire guys will be taking the Verizon & AT&T jobs when they launch LTE because they will have OFDM experience and will have experience launching a 4G network. Hopefully there's a telecom job left for YOU. Good luck to you my friend, who doesn't have his facts straight.
    2008 Aug 01 12:05 PM | Link | Reply
  •  
    Never once said AT&T has EVDO...they have HSDPA which is actually faster. I also said no one has attempted WiMax on a national basis (as someone above mentioned 130 countries using it now) until now so that's the basis for our negativity against it being done, especially by Clearwire. I also beg to differ that Sprint's EVDO Rev. A network is as large as Verizon...they're not even 100% one for one yet (Rev. A as opposed to Rev. 0). Try reading the posts before writing nonsense down boy!

    LTE will be launched by 2009, mark my words. And by the way fool, it also used OFDM (not a new technology...being used currently by most carriers already) so again, PLEASE get stats straight (not strait as you write above) before posting nonsense!

    I actually work for MetroPCS if you really want to know & we don't have data for customer use on our network...but obviously more informed than you are!
    2008 Aug 01 01:40 PM | Link | Reply
  •  
    The Scud-I was actually referring to 3G COVERAGE for AT&T, not that they have EVDO. They use HSDPA/UMTS for their 3G network.
    2008 Aug 01 01:42 PM | Link | Reply
  •  
    Geddy-Look who's dreaming that LTE will be out by 2009! And by the way Fool, I know that LTE is OFDM based, that's why Sprint and Clearwire folks will have more experience, as they are further along deploying that technology. And PLEASE name the carriers, if you can, that already are using OFDM before posting your NONSENSE!

    So let me get this STRAIGHT, boy! You work for MetroPCS, who doesn't have a data network to speak of, and claim to be informed on BWA deployments? Your credibility is shot. You're probably a disgruntled ex-Sprint employee or contractor. BTW, you're better at spell checking than getting your facts STRAIGHT!
    2008 Aug 01 02:32 PM | Link | Reply
  •  
    to all;

    actually the Sprint evdo rev A network does cover more pops, cities and aiports then Verizon. In addtion, ATT HSDPA is lagging way behind the coverage follows:

    airports cities population

    att 469 5180 148M
    sprint 1531 16202 248M
    verizon 1447 14523 245M

    this is information was taken from their own websites and verified by RCR News



    2008 Aug 01 02:43 PM | Link | Reply
  •  
    Not exactly true BaileyD. See links below (VZW covers >256m pops), in which on of them is from RCR News where you claim to have pulled you statistics. Just scroll down a bit in the article to see that VZW covers 80% of the country with Rev. A, "more than any other carrier."

    aboutus.vzw.com/bestne...
    www.rcrnews.com/articl...
    2008 Aug 01 04:40 PM | Link | Reply
  •  
    Everyone here seems to be missing a critical distinction. While there have been some modest successes in WiMax so far, they've all been fixed wireless. No one has (to my knowledge) deployed a successful *mobile* WiMax network--successful in the sense of operation or profitability. There is no 3-year head start over LTE here.

    As for Sprint/Clearwire, the latter has mostly been focused on slower 1-2 Mb/s fixed and nomadic deployments, to decidedly mixed customer reviews. Sprint is 8-12 months behind their initial WiMax deployment plans, and that's before the distraction that is being caused by the joint venture.

    I suspect both technologies will coexist eventually and perhaps complement each other in some ways. But it's not a slam dunk for WiMax by ANY indication.
    2008 Aug 01 05:11 PM | Link | Reply
  •  
    HSDPA uses OFDM moron! Look it up...
    2008 Aug 01 10:23 PM | Link | Reply
  •  
    Geddy - A customer just walked in to your MetroPCS Store. Please take care of the customer.
    2008 Aug 01 10:46 PM | Link | Reply
  •  
    We get them all the time...though I work on the network side. Not a problem, we'll probably end up buying what's left of "Sprextel" anyway soon!
    2008 Aug 02 10:31 AM | Link | Reply
  •  
    Geddy-please try to understand what you read before posting. HSDPA is based on WCDMA. But I won't call you a moron, because it's nice that you try. LTE, which is not deployed yet, will be HSOPA (High Speed OFDM Packet Access).

    2008 Aug 02 11:59 AM | Link | Reply
  •  
    I know for a fact that intel is working on a multi-radio (all in one) - which speaks to the coexistance of both/all freqencies. In the future, I suspect consumers and prosumers alike will feel ambivalent towards the delivery method as long as it is the fastest possible transport type.
    2008 Aug 02 12:45 PM | Link | Reply
  •  
    I don't believe anywhere on here I posted or disputed a post stating HSDPA was based/not based on WCDMA...that's already a known fact. Not sure where your statement on that came from. All I stated was that it used OFDM in some cases as well, since you stated Clearwire techs would have that advantage over other carriers in experience (i.e.-not true). It is also well known that LTE will use OFDM as well so again, not sure where that statement came from (I believe I already hinted at that in a previous post as well).

    Have a great day!
    2008 Aug 03 12:09 PM | Link | Reply
  •  
    Geddy;

    I know how to read thank you:

    Below is the actual quote by the Verizon spokesperson in the article, his statement contradicts the web site:

    Verizon Wireless jumped into the debate boasting in a release that the carrier’s 3G network covers 80% of the U.S. population, the most people of any wireless service provider. Tom Pica, a Verizon Wireless spokesman, said the carrier measured its coverage in potential customers covered, and counts 245 million pops covered with its 3G service.

    Sprint Nextel measures its network in total cities and airports with service; saying it reaches 246 million pops in 16,022 cities and 1,506 airports.
    2008 Aug 04 08:55 AM | Link | Reply
  •  
    Geddy;

    I have an issue with the math that Verizon is using, if they are covering 256M pops; then that is 85% of the 301M available population. so it is either 245M pops at 81% or 256M pops at 85%; I think they would be touting 85% coverage if they actually cover the 256M pops.

    In reference to WiMAX and LTE scalability. Lets remember that since WiMAX be it fixed or mobile is a standards based service. This being said innovations will be introduced to market in a much quicker fashion. And, since it will have at minimum an 18 to 24 months in market lead time, upgrades and enhancements will also have that same lead time. Being in the Telecom industry for 30 years now I do not see scalability being a hurdle that can not be overcome. When I first came into telecom a DS1 and DS2 (no DS3 at that time) were only used by carriers as IMTs between the CO's, we have carriers (sprint) today that have started to deploy 40G backbone circuits.

    I agree with Scott Berry when he states that WiMax is not a slam dunk but it is surley a lay up when LTE is not even on the court yet. They will work in conjunction in the future.
    2008 Aug 04 10:38 AM | Link | Reply
  •  
    Ari Zoldan is one of the leading wireless pioneers in the telecommunication sector, he predicted the Voip explosion years back and is someone to watch when he opens his mouth regarding WiMAX and wireless predictions..............
    2008 Aug 04 11:13 AM | Link | Reply
  •  
    Geddy-you claimed that OFDM is not a new technology and is already deployed by carriers, but failed to mention which carriers. Then you said that HSDPA uses OFDM, which is not true. Maybe a future version of it being called LTE will use it, if it ever becomes a standard. Nice try on the back-stepping.
    2008 Aug 04 03:28 PM | Link | Reply
  •  
    AT&T has HSDPA & they use OFDM in certain situations (i.e.-MIMO applications where used). Can be easily found on the internet.
    2008 Aug 04 08:10 PM | Link | Reply
  •  
    Bailey, didn't mean to argue numbers, I just based it on what was in the unbiased article/link I posted above. Every carrier seems to "overstate" their stats so that could be the case here. I do know (as well as everyone else) that Sprint has lost customers on an unheard of basis the last couple quarters which is never a good thing & is indicative of problems. Have no idea why they're leaving...doesn't really matter to me. They still left & my thinking is unhappiness.
    2008 Aug 04 08:17 PM | Link | Reply
  •  
    clearwiresucks.com/blo.../

    Enough said. Before you reply, yes I know EVERY carrier has disgruntled customers....but an entire site dedicated to it? WAY too funny!
    2008 Aug 04 09:00 PM | Link | Reply
  •  
    Geddy;

    Not meaning to argue numbers just want to be factual. The fact is I use ATT, Sprint and Verizon as part of what I do. All carriers have their own pluses and minuses. It seems that ATT has decided to take the slow growth approach to creating a true nationwide broadband network and I have given up using their data card because of the poor data speeds this is due to the very small foot print for HSPDA. Between Sprint and Verizon there is virtually no difference when it comes to standard data transmission i.e. internet browsing. In NY Sprint has the edge in the majority of the city and Verizon is better in the rest. When you move to the enterprise applications and remotely accessing an MPLS or IPVPN network it works out that the Sprint network stands out so far. In additon; if you are streaming video (quality)or downloading songs OTA(speed) Sprint has the edge so far but I am still testing . I am testing voice and data standalone devices also smartphones with the phone as a modem functionality for a fortune 2000 company.

    On WiMax, Fixed WiMax will become the replacement to the copper last mile for the LEC and the some of the cable providers. Mobile WiMax will have an 18 to 24 month head start on LTE. This alone will give Sprint a very strategic edge in the WiMax/LTE 4G battle. I hope everyone realizes that a true open architecture like Wimax or LTE is just that open. You will be buying your devices from the big box retail chains. But, what people do not realize yet is that they will be paying retail list price for the devices and the carriers will not be subsidizing the cost like today. Welcome to the business model most of the worlds wireless carriers use today.
    2008 Aug 04 10:44 PM | Link | Reply
  •  
    Just an observer: Lots of pro Sprint/Clearwire employees or enthusiasts on here. Reminds me of the fanatical Amp'd Mobile and Helio technology threads where their employees and executives defended each model to the death..... literally. Each company was supposedly supposed to crush their competitors and change the industry as we knew it. Who knew?? :)

    We can all quote facts/figures and post URL's found in Google to make our take on anything sound rosy. After all, most articles are written by man for man with an agenda for their cause.

    Wasn't Pivot going to crush the telcos too? Where did that go?

    It's not so much that Wimax isn't a great technology or that it won't reach any economy of scale. Part of the whole method to success lies in a business' ability to execute successfully and meet goals.

    Let's face it. Sprint's current voice/data network is decent and even better than AT&T in certain areas. That doesn't equal instant success or superiority. Poor leadership, terrible marketing, confusing policy adherence and terrible customer service has led them to where they are today.

    A properly built network, great technology or myriad of devices will only take a company so far.

    I believe out of fear of falling to the wayside, you'll see more of those involved in the Wimax camp push for compatibility standardization with LTE as it pushes forward into development.
    2008 Aug 05 02:11 AM | Link | Reply
  •  
    danny.boi

    Many of your statements are correct. I am an unbias player in this stream. Pivot was actually a consumer based tool/service that would work inconjunction and enhance the cable companies services. And, yes there will be a compatibility standard developed between LTE and WiMax
    2008 Aug 05 08:53 AM | Link | Reply
  •  
    Not sure if WiMax will have that big of a headstart on LTE. Just read the latest article on Yahoo (regarding IDT) where they mention Clearwire's 1st four markets won't launch until next year...& again it's only four markets. You can bet that when Verizon & ATT launch LTE, it will go large scale & quickly overcome any "first to market" advantage WiMax has/had. LTE testing has already begun in sites so it's just a matter of a short time.
    2008 Aug 05 03:10 PM | Link | Reply
  •  
    WiMAX will be deployed before LTE and both use OFDM (which is not used in HSDPA by the way). But there is a big difference between them, and that is the business case. Let's remember that, as soon as it is the real driver of the technology evolution. WiMAX is a new standard, which has good supporters and is being pushed by Sprint-Nextel as 4G (which it is not... yet) to offer broadband nationwide in the U.S. Sprint's WiMAX is 802.16e which is not related to all "WiMAX references" in the world and is not backwards compatible. Its standard has no definition for compatibility with any other technology, not even Wi-Fi handovers are mentioned. And not all the big players support it (Ericsson, who happens to be the biggest infrastructure supplier in the market).

    LTE, is supported by 3GPP and all the infrastructure vendors. Its compatibility with GSM, UMTS, HSDPA and HSUPA is defined since the start. It allows use of multiple bandwiths (starting from 1.2MHz) and FDMA and TDMA options, which allows it to be implemented in every piece of frequency that is currently used for 2G or 3G networks, and grow in smooth way. The terminals that will support LTE will have an smooth evolution as the HSDPA terminals did. You actually don't need to build a huge network to start offering it (this might sound good for carriers) and finally, all big players are supporting it (T-Mobile, AT&T, Vodafone, Telefonica, America Movil, etc).

    I believe in WiMAX, as a good broadband solution as backbone for rural areas... not as an access solution, as it is not compatible with the current techonologies, not even CDMA which is so well spread in the U.S.

    The times when a new technology could just appear and make a business case for itself are gone. If you are not compatible with the current access networks you may not have any future. A business case for a 14B USD investment in a technology which not everyone believes in, and with an LTE solution coming... sounds risky. May work but I would never bet on that. Disclaimer: Telecom Engineer from NSN, ex-Nokia Networks and ex-Motorola
    2008 Aug 07 08:27 AM | Link | Reply
  •  
    Very good post contreras. My mistake on HSDPA using OFDM; going by what I was told from a friend at AT&T (I do know however as still a counterpoint to contention that it's a new technology that some applications of WiFi use it as well as even good old copper & DSL). Another subject not broached here is what will the actual Sprint customers use for 4G data on the existing network? I have not seen any talk of making the WiMax mobiles compatible with CDMA voice nor would I expect that since voice I'm sure will be offered by Clearwire over their network like it is currently (using a VOIP technology over their Expedience junk). Curious as to whether Sprint will go LTE like the rest of the carriers or even possibly go the "cheap" route & go UMB (which is the next iteration of EVDO; Rev. C I believe)? Thoughts?
    2008 Aug 07 11:06 AM | Link | Reply