Thursday, November 10, 2011

Clearwire inks wholesale deal with NetZero's United Online

Mobile WiMAX carrier Clearwire (NASDAQ:CLWR) announced a five-year wholesale deal with United Online, the company behind the NetZero Internet service brand, extending its wholesale umbrella at a time when it is shuttering its own branded postpaid service.
The terms of the deal were not disclosed. NetZero customers will be able to access Clearwire's network in early 2012, though the companies did not say exactly when the service will become available.

Clearwire and United Online said that consumers will be able to access the service by purchasing either a NetZero USB modem or a NetZero personal hotspot that can connect up to 8 Wi-Fi enabled devices simultaneously. Clearwire's network currently covers around 130 million POPs. Clearwire spokesman Mike DiGioia directed questions on pricing, availability and devices to a United Online spokesman, who declined to comment.

NetZero started in 1998 offering free dial-up Internet, and in 2003 it launched NetZero Hi-Speed, which was the fastest dial-up service offered at that time. However, NetZero is clearly looking to expand, and noted Clearwire's WiMAX network provides speeds of 6 to 10 Mbps with a wider range than Wi-Fi.

Clearwire's NetZero deal comes after Clearwire disclosed that it will streamline its Clear-branded service to offer unlimited prepaid Internet service at $50 per month. The move essentially removes its previous postpaid service plan options along with device leasing, activation fees, early termination fees and restocking fees.

Moreover, Clearwire plans to move to LTE-Advanced network technology, but that action is contingent on the carrier obtaining another $600 million in financing. Further, the carrier has said it needs between $150 million and $300 million to maintain its existing WiMAX network.

Sprint Nextel (NYSE:S), Clearwire's majority owner and largest wholesale customer, recently announced its own 4G plans that involve building its own LTE network on its 1900 MHz spectrum--plans that did not include any mention of Clearwire. However, Sprint recently disclosed a non-binding agreement with Clearwire under which the companies will work to develop LTE roaming between their planned networks. Clearwire reports its third-quarter earnings after the market closes Wednesday.

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