Rural WiMAX Already Profitable

Posting from Whistler so I’ll keep it brief:

As I’ve argued before, WiMAX is going to see the most success in emerging markets, and areas in which wired broadband doesn’t see big penetration (i.e. outside of cities). In those situations, WiMAX’s property of having 1/10th the network build cost gives it a big advantage.

This is no secret to DigitalBridge Communications, whose WiMAX network in Rexburg, Idaho is already producing cash-flow-positive results according to CEO Kelley Dunne. In an interview with GigaOM’s Paul Kapustka, DigitalBridge’s CEO describes their strategy of building around Clearwire and Sprint, aiming at underserved markets with 150,000 residents or less. This means little to no competition in both wired and wireless broadband services, as 3G data networks still haven’t done the buildout to small towns.

This strategy is blatantly superior to that of Clearwire’s, who is swinging for the fences by taking on hundreds of millions in debt and has yet to see profit. Investors seem to agree with DigitalBridge – they’re just raised a B series round of funding of $20 million to fund its buildout to 15 more small towns.

In defense of Clearwire, their coverage map shows that they’re also taking a shot at second-tier cities, with places like Roseburg and Medford, Oregon.

Clearwire, XOHM, DigitalBridge: game on.

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