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Originally published March 13, 2011 at 10:01 PM | Page modified March 14, 2011 at 6:19 AM

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Brier Dudley

Wireless City going the way of Detroit?

With corporations in flux, will Seattle become the Detroit of the wireless industry?

Seattle Times staff columnist

It's looking more likely that T-Mobile USA and Clearwire could get swallowed up by Sprint.

Which raises the question, will Seattle become the Detroit of the wireless industry?

Not too long ago this was Wireless City, the heart of the industry. It started when McCaw Cellular assembled the first nationwide cell network in the 1980s.

McCaw sold to AT&T in 1994, but AT&T Wireless kept a presence here and more huge companies were formed.

The McCaw network spawned Western Wireless and VoiceStream, which became T-Mobile.

It also controlled Nextel, before it was sold to Sprint. Then Craig McCaw started Clearwire in 2003, pursuing his vision of wireless broadband.

Now what's left is in play.

T-Mobile has to decide whether to stay independent or join forces with Overland Park, Kan.-based Sprint, to better compete with AT&T and Verizon Wireless, said Chetan Sharma, an Issaquah-based industry consultant. Major markets around the world eventually end up with three large players, he said.

Sprint and T-Mobile would have 83 million subscribers — heft comparable to AT&T's 95 million subscribers and Verizon's 103 million, he said.

There's been speculation that Clearwire could be rolled in, but its chairman and acting chief executive, John Stanton, doesn't foresee a sale.

"I expect that Clearwire will continue to be here and continue to be independent and continue be an important employer," he said.

Stanton, a McCaw veteran who led VoiceStream through its sale, doesn't see a wireless Detroit here.

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"It still is the capital of wireless," he said.

The region still has the largest percentage of population working in the industry, he said, including 4,500 AT&T employees still here and 3,000 to 4,000 more at T-Mobile.

The wireless industry contributed to hundreds of smaller companies, several venture firms and mobile efforts at Microsoft and other tech companies, he said.

But from a software perspective, the epicenter has shifted to Silicon Valley, Sharma said.

"If Seattle's going to stay relevant, it's going to have to do more on the software side of things," he said.

That could happen, if Microsoft gets traction with its phone platform. Nokia is also likely to expand its presence in the area as its Microsoft partnership gets rolling.

Amazon.com could increase its mobile business. Sharma said it's likely the company is exploring the potential of new mobile devices based on Android or other operating systems.

Even if T-Mobile and Clearwire are sold, they'd likely remain big employers for perhaps five years, Sharma said.

In the meantime, Seattle needs to see more development in wireless applications, operating systems and services to stay relevant, he said.

"It does need to reinvent itself if it still wants to be considered a wireless hub," he said.

It's probably too soon for an inspirational Super Bowl ad, like Chrysler's spot talking up Detroit's history and skill.

If it gets to that point, call Stanton for the voice-over:

"This is Wireless City, and this is what we do."

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

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About Brier Dudley

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.
bdudley@seattletimes.com | 206-515-5687

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