Clearwire adjusts contract with Intel, hedges bets on WiMax

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On an earnings call yesterday, Clearwire announced it has adjusted the terms of its multi-year contract with chip giant Intel, allowing Clearwire to terminate the contract with only 30-days notice. What’s the big deal? Previous contract verbiage committed Clearwire to purchase WiMax equipment from Intel — seemingly committing the company to WiMax — through November 28th of 2011. Clearwire CFO, Erik Prusch, responded to analyst’s questions about a potential technology change from WiMax to LTE by saying Clearwire will, “keep evolving as we move forward.” During his CTIA keynote, Dan Hesse, Sprint CEO and public champion of WiMax, was also a bit cagey when asked about the merits of WiMax v. LTE. While emphasizing Sprint’s commitment to WiMax — and his opinion that there is plenty of room in the 4G marketplace for two competing technologies — Hesse said that the two technologies were not that far apart and Sprint, along with its partner Clearwire, could make the change from WiMax to LTE if necessary. Regardless of which radio frequency you prefer, the profitability of WiMax isn’t up for debate at the moment.  GigaOM reports, “in its three most mature WiMAX markets…[Clearwire] has 47 percent gross margins and 2.7 percent penetration.” Clearwire also noted it has 971,000 total subscribers, 283,00 of which it added during the first quarter of this year. 

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