Earthlink (NASDAQ:ELNK, news, filings) is planning another foray into wireless services, this time with 4G. This morning they and clwr announced a wholesale 4G agreement that will help power Earthlink's wireless internet service. By 4G here, they mean WiMAX for now, with an eye toward LTE services in the future.
For EarthLink this is a consumer offering aimed at in-home usage, as opposed to a fully mobile data offering in direct competition with traditional wireless operators. In other words, they're looking to sell this to their declining dialup and DSL customers.
It's a bit of a departure from the company's recent public focus on building its managed IT services business on top of the CLEC assets it has been integrating. But those access revenues still supply a lot of cash flow, and using Clearwire to continue that is a smart move since the cloud-based stuff will inevitably take time to really ramp. The two seem like natural partners, assuming each can get through its current respective transitional period.
Just what the wireless data business will look like in a few years is a very open question these days. Everyone is out hunting for spectrum, but Clearwire has a bunch if it can just bring it to market in a form that it can wholesale to the rest of the sector.
The company is still in the process of constructing its LTE Advanced-ready network, and Earthlink and Clearwire do expect to extend the agreement to encompass those capabilities when they are ready.
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