WiMAX Hits Oregon Amid Headwinds

Portland, Oregon has 4G service today after Clearwire launched its second deployment of WiMAX service.

Clearwire called the service an “unmatched” combination of Internet speed and mobility for both businesses and homes, according to Clearwire, the company behind the launch.

Today’s Oregon deployment takes place three months after Sprint (NYSE: S) and Clearwire (NASDAQ: CLWR) deployed their initial Baltimore network on September 29.

The Baltimore service, initially called Xohm, will be renamed “Clear” now that Spring and Clearwire have officially formed the Clearwire (NASDAQ: CLWR) company. The $14.5 billion joint venture received regulatory approval in late 2008. Partners include Intel, Google, Comcast and Time Warner Cable.

All the players are hoping to cash in on the lucrative Internet services industry as both businesses and consumers are hungry for faster and more stable Internet access.

The WiMAX 802.16e wireless networking standard, short for Worldwide Interoperability for Microwave Access (DEFINE:WIMAX), offers a transmission speed more than five times faster than current wireless networks.

The Portland service costs $20 per month for residential subscribers and $30 for mobile subscribers. There is also a daily pass option for $10. According to the company, residential users will have a 6 Mbps download speed available, while mobile customers can expect up to 4 Mbps download speeds.

While WiMAX can deliver speedier Internet access the billion-dollar 4G effort faces some formidable challenges.

First is the recessionary economic environment and the question of whether consumers have expendable income to enjoy new additional services.

Then there’s a legal battle ignited last month by a Texas wireless provider that claims Sprint and Clearwire are infringing on a 4G patent.

The third, and maybe most challenging hurdle, is whether the company will be able to finance its network plans given that an additional $2 billion is needed. That’s no easy feat given the sluggish credit market facing companies.

Though there are no WiMAX handsets yet available, Clearwire and third party vendors are pushing out compatible modems and devices. One is a $50 USB laptop modem from Motorola, and Clearwire offers subscribers a high-speed modem for $4.99 a month.

Last year leading computing players including Samsung, Dell, Lenovo and Acer announced plans for building WiMAX-compatible notebooks with WiMAX chips and Internet tablets that should will be available in the first half of this year.

Currently, there are Xohm-branded Samsung Express wireless cards retailing for $59.99, and ZyXEL modems for $79.99. Additional WiMAX devices arriving this year include a ZTE USB modem, Intel Centrino 2 WiMAX notebook PCs and the Nokia N810 WiMAX Edition.

Future network deployments this year beyond Oregon are planned though Clearwire has not announced any specific markets.

“Clearwire is providing a valuable service designed to improve our customers’ productivity and make their lives more enjoyable, wherever they happen to be in our coverage area,” Benjamin G. Wolff, Clearwire CEO, said in a statement. Clearwire was not available for comment by presstime.

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