Best Buy to sell WiMAX services

Teams with Clearwire; will contract trends start to change?

Industry analysis by expert Joanie Wexler, plus links to the day's wireless news headlines

In a move that could raise WiMAX's profile with mainstream users, Clearwire and Best Buy have struck a wholesale deal in which Best Buy will sell self-branded mobile Internet services using Clearwire's WiMAX network.

The service will become another option for customers under the "Best Buy Connect" service brand. Best Buy Connect, which became available July 11, bundles device purchase, service activation, billing and customer support into one package deal for customers.

8 pieces of cool WiMAX gear

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In a move that could raise WiMAX's profile with mainstream users, Clearwire and Best Buy have struck a wholesale deal in which Best Buy will sell self-branded mobile Internet services using Clearwire's WiMAX network.

The service will become another option for customers under the "Best Buy Connect" service brand. Best Buy Connect, which became available July 11, bundles device purchase, service activation, billing and customer support into one package deal for customers.

8 pieces of cool WiMAX gear

The electronics retailer will begin selling Clearwire's WiMAX service in 2011, when Clearwire is expected to have 120 million U.S. residents covered. Currently, the operator's CLEAR service is available in about 55 U.S. cities across 20 states.

Sprint, the majority owner of Clearwire, resells the WiMAX service under the "Sprint 4G" brand; several cable companies also resell the service.

In terms of what the service will cost from Best Buy, the retailer has only reportedly said that pricing would be "competitive." But it makes one speculate.

Could this be the beginning of the end for the dreaded phone service contract? Yes, it's unknown yet what the pricing for the 3M to 6Mbps, Best Buy-branded WiMAX service will be. But if you look at Best Buy's 3G mobile service pricing, there doesn't seem to be much incentive to enter into a contract.

You pay the same for 5GB of data per month ($59.99) regardless of whether you have a two-year contract, one-year contract or no contract. The same goes for 500MB usage ($39.99). The overage fees aren't any different, and you pay a higher termination fee if you change plans early with the two-year contract ($175) than with the one-year contract ($125).

Granted, the economic enticement is likely to lie in the percentage discount of the access equipment (laptop, netbook, tablet, smart phone, etc.). And we can't assume that the pricing model for the WiMAX service (dubbed a "4G" service) will parallel the pricing of the 3G service.

But when testing out the new kid on the block -- both Best Buy as a service provider and WiMAX as a newer wireless technology service option -- it might be prudent to go for the "no contract" option.

Let's say the pricing model does parallel the 3G service costs. Let's also assume that the full cost of the device lies between $300 and $600 and you pay full fare for it. You can think of that as costing you $30 to $50 a month for "use of the device" for a year. But if you use the device and pay the associated "device usage fee" for just four to five months, you've paid in device fees what you'd pay in a termination fee were you to give up on the contract early.

It might be wise to "buy" the flexibility to vamoose if you don't like the service or support during these times when wireless services and their associated prices and pricing models are changing constantly.

Read more about wireless & mobile in Network World's Wireless & Mobile section.

Joanie Wexler is an independent networking technology writer/editor in Silicon Valley.