EarthLink will resell wireless broadband on Clearwire's WiMax network starting early next year and later will launch a service based on that company's planned LTE network.
The rollout will begin with fixed-wireless WiMax service in consumers' homes and will expand to include mobile devices and small-business services, the companies said. Fixed wireless Internet comes over the airwaves but is designed to be used in one place. EarthLink has plans to offer a WiMax USB dongle for mobile data access on laptops but not to sell phones, said Jennifer Spindel, EarthLink's vice president of consumer products. When Clearwire launches its LTE network, expected next year, EarthLink plans to offer services on that network, too. No financial terms were disclosed.
The partnership fits the playbooks of both companies. Both EarthLink and Clearwire are underdogs in a U.S. broadband business dominated by AT&T, Verizon and the big cable operators. EarthLink resells Internet service on the networks of facilities-based operators, including DSL (digital subscriber line) carriers, cable operators and satellite provider Dish Network. Clearwire makes most of its money selling network capacity wholesale to other service providers.
Though Clearwire's biggest partner by far is Sprint Nextel, it has other wholesale customers, including prepaid mobile operators Jolt Mobile and Cricket Communications. While Clearwire has joined Sprint and other major carriers in embracing LTE, its WiMax network isn't going away anytime soon. According to an agreement between Sprint and Clearwire announced last December, Sprint will be able to use the original 4G network through 2015.
Access to Clearwire's 4G networks will allow EarthLink to add mobile and wireless components to its service offerings. EarthLink has about 1 million consumer and 150,000 business customers for its existing broadband services. Like Clearwire, it has been operating in the red. Last month, EarthLink reported a net loss of US$1.1 million for the second quarter, on revenue of US$338.2 million. Its revenue was down by 2 percent from a year earlier.