Sprint-owned Clearwire, a wireless ISP service that currently provides 4G services Sprint phones like the HTC EVO 4G, will offer pay-as-you-go 4G access. The service, nicknamed “Rover,” will charge by the day, week, or month for users who buy a special connection device. From CNNMoney:
Customers can buy one of two devices to connect to the service: a $150 “Puck” that serves 4G mobile broadband to up to 8 devices or a $100 USB modem called the “Stick.” Users can then buy access to Clearwire’s 4G network for $5 a day, $20 a week or $50 a month without a contract.
Clearwire built the nation’s first 4G network, but has so far been unable to make any money off of it. It has been hampered by cost overruns and delays in its rollout. Clearwire lost just shy of $1 billion in the first six months of this year.
Competition is also ramping up. Currently, Clearwire is the only wireless network to offer 4G service, but that’s soon to change with Verizon (VZ, Fortune 500) set to roll out its 4G network later this year and AT&T (T, Fortune 500) scheduled to unveil its 4G network in 2011. Verizon and AT&T are also placing their bets on a network standard called LTE, or Long Term Evolution, which experts say is able to offer faster speeds than WiMAX.
But Clearwire said that Rover can help give the company a leg up on the looming competition. Targeting 18- to 24-year-old Internet-addicted “Generation Y-ers,” Clearwire is betting that younger people who are buying Internet services for the first time on their own will be attracted to the speed and availability of its network, plus the lack of a contract or fees.
Interestingly, the prepaid mobile market comprises 20% of total mobile users, according to CNN. Young people are making up an increased proportion of that market. Yet I doubt that Clearwire can win over enough of those youngsters to make much of a dent. Their parents and peers will already have customer loyalty to bigger networks like AT&T and Verizon. That peer loyalty will outweigh any marketing campaigns or first-mover advantages.