Google, Intel, Comcast, Time Warner Cable and Bright House came together last week to invest in a WiMax firm that combines the assets of two players developing WiMax on their own: Sprint and upstart technology firm Clearwire.
WiMax is essentially the network that will deliver data and voice services to phones, but much faster than what consumers are used to using. It would turn the country into a giant hot spot -- in theory, at least. It's often referred to as a fourth-generation wireless service -- or 4G -- as it will be able to deliver quicker mobile-internet service than the 3G services offered by many carriers. (The first two generations of cellular service were analog and digital.) The venture's WiMax service should cover 120 million to 140 million people by 2010, said executives, who initially will concentrate deployment in the top 100 markets.
Accessing the mobile internet today is often compared to accessing the PC web when much of the country ran on slow, dial-up service. Consider how the advent of broadband services have changed online consumer behavior and you get a sense of how much it could change the way people use the mobile web.
It's definitely good for Sprint, said Larry Harris, president of Ansible, an Interpublic mobile-marketing firm, explaining that it was too far down the line with Clearwire to simply scrap the service. But now Sprint gets to share the cost with its partners, which collectively are investing $3.2 billion to build it out. Under the agreement, Sprint will have a majority stake in the joint venture and control seven of 13 board seats.
It's also important for Google, which hopes mobile will be a big growth area. Google has managed to command a lead in mobile search, though nothing like the massive share it has in the PC-based internet world. According to M:Metrics data, Google had a 38.3% share as of August 2007. (Yahoo is the next closest with 25.4%.) With its involvement in Clearwire, Google will provide search and applications to the network's users.
What does it mean for advertisers?
"Your brand, everywhere," said Eric Bader, partner in Brand in Hand, which advises marketers on their mobile strategies. "It's a great thing for brands because we're going to have more and more occasions to relevantly interact with our consumers. And it gets us closer to a sale, to the register."
And here comes the sci-fi-inspired part: the technology, said Mr. Bader, won't necessarily be confined to mobile phone devices, but could infiltrate ordinary household items: "toasters, TVs and car keys. It's the beginning of truly connected appliances. ... It gives us a canvas on which to start to converge."
But you'll have to be patient. It'll be a several-year process to deploy WiMax, and devices that use the service will have to have a special chip in them to pick up the signal -- Intel has a WiMax chip, which explains its excitement over the venture. It'll take a generation of devices, about 18 months, to really start to see widespread offerings of WiMax-enabled product. Clearwire execs suggest that in 2009 people can expect to start seeing WiMax chipsets embedded in all sorts and sizes of consumer electronic devices.
Sprint has been a big proponent in WiMax technology and owns a significant chunk of 4G bandwidth. But the service has languished under the carrier as Sprint addressed many issues, including a massive migration of its customers to other carrier services and the replacement of its CEO late last year with former AT&T executive Dan Hesse.