CTIA: Clearwire, 4G Mobile Network Take Center Stage

LAS VEGAS -- Sprint Nextel CEO Dan Hesse and Clearwire CEO William Morrow took turns crushing self-serving softball questions tossed their way rway by CTIA President Steve Largent during a Q&A session masquerading as the second keynote session of the CTIA Wireless show.

Hesse didn't waste any time reminding attendees of what he called Sprint Nextel's "very strong spectrum position" and the fact that his company was the first of the major carriers to embrace 4G technologies and the WiMAX standard that it hopes will forever change the way consumers and businesses view their voice and data plans.

Data Plans, Rate Plans Moving to Gigabytes

"Just as the economics of voice got better, with 4G we're going to produce a gigabyte of video content cheaper and give it to people easier," Hesse said. "Two years from now, the rate plans discussion will change from the number of minutes in a bucket or the number of text messages in your plan to how many gigabytes will be in your bucket. That will determine the pricing tiers and market segments."

Sprint Nextel (NYSE: S) this week unveiled its 3G/4G dual-mode Android device, the HTC EVO, featuring a 4.3-inch touchscreen, a Sense user interface for easily going back and forth between applications and lightning-quick download speeds to take advantage of the 4G network it and its partners have spent billions building out.

"Data usage will grow at compounded annual growth rate of 108 percent for the next few years and video content will grow at 131 percent," Hesse said. "The user experience for video is most effective on 4G."

A Mix of Mobile Networks for Sprint and Clearwire?

Hesse was straightforward in explaining why Sprint and Clearwire embraced the WiMAX standard rather than the fast-emerging Long-Term Evolution (LTE) standard for 4G, saying that "it came down to time to market" and pointing to the fact that Sprint's extensive spectrum license allowed it the luxury of moving first and still leaving the door open for other technologies and standards.

"LTE will most likely be the larger of the two 4G standards," he said. "But for us, we couldn't wait. WiMAX was tried, true and tested. We felt we could always add other technologies later."

Clearwire CEO William Morrow reiterated the point: "If we need to, we can sunset one technology."

"Once we reach a point where LTE is the same or better than WiMAX, then we'll be ready to go that route," he added.

Clearwire, which has about 700,000 customers, only increased its average revenue per user (ARPU) $0.16 last year to $39.86, is still only available in a handful of markets and will require billions more in in investments to reach the potential seen by Sprint and partners such as Google (NASDAQ: GOOG), Time Warner Cable and Intel (NASDAQ: INTC).

Morrow said he expects Clearwire to reach profitability within 18 months and will cover more than 120 million people. The company is also actively pursuing wholesale deals with other partners outside its core group of investors and will be making some key strategic partnership announcements later this year.

Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.