Clearwire Chases MVNO Market with Simplexity Deal
Clearwire stepped up its efforts to get more wholesale customers today as it braces for the loss of its largest customer, Sprint, which is phasing out devices that use Clearwire's WiMAX network in favor of its own LTE service.
Clearwire has hired a firm to reduce the "time to market, effort and cost" of using its WiMAX network for companies that want to resell the service under their own brand, known in industry jargon as mobile virtual network operators (MVNO).
The firm, Simplexity, will make it easier for companies to resell Clearwire's service by handling logistics such as sales and order acquisition, activation and provisioning, distribution and logistics, billing and subscriber lifecycle management, customer care and management analytics.
"Simplexity's ability to offer MVNE (mobile virtual network enabler) services adds a new level of choice and flexibility that will make it even easier for potential wholesale partners seeking a simple back office solution to support their 4G product offerings," said Don Stroberg, president of Clearwire's wholesale business, in a statement.
Simplexity is now Clearwire's preferred provider of services for its wholesale customers, though companies still have the option of going directly through Clearwire. The service provider handles websites that sell wireless products for a number of top brands, including RadioShack, Target and Motorola. It also owns and operates Wirefly.com, which claims to be the Internet's largest authorized retailer for wireless phones and service plans.
Clearwire has a limited number of wholesale clients, but depends on those customers for the bulk of its revenue because of its comparatively weak direct-to-consumer business.
Its wholesale subscribers outnumbered its own retail customers by eight to one at the end of the third quarter - 8.22 million wholesale subscribers to 1.32 million retail subscribers - and wholesale revenue accounted for more than one-third of its sales. Sprint smartphone users account for the majority of Clearwire's wholesale subscribers.
Recent developments have put Clearwire's wholesale subscriber base under pressure.
Time Warner Cable and Comcast said last month they would eventually stop offering Clearwire's WiMAX service because they had signed an exclusive contract for access to Verizon Wireless' LTE network as part of their multi-billion-dollar AWS spectrum sale to the mobile operator.
Sprint plans to stop selling phones that run on Clearwire's network by the end of this year but isn't completely ending its relationship with the WiMAX provider. Sprint will eventually lease extra LTE capacity from Clearwire, which plans to overlay its WiMAX network with TD-LTE in some high-traffic areas.
UnitedOnline said in November it would start using Clearwire's network to offer mobile broadband service under its NetZero brand. The product was slated to hit shelves early this year but has not yet been launched.