Sprint Nextel Corp. may have gotten a jump-at least in the rhetorical game of crafting perceptions-over its arch-rival and fellow CDMA carrier Verizon Wireless with its announced plans to implement CDMA2000 1x EV-DO Revision A and its intent to be first to market with the latest network upgrade.
Or not. Naturally, it depends on who you listen to. And there are those-the bemused analysts, among them-perennially unswayed by rhetoric, who say the network migration has been long-expected, that Sprint Nextel’s investment is merely the carrier catching up with its rivals and that Verizon Wireless is expected to roll out its Rev. A upgrade on a roughly similar schedule-though Verizon Wireless insists it will not be goaded into prematurely announcing its own timetable.
Perhaps the verbal skirmishing between the two wireless players says more about their respective ambitions and frustrations and the competitive atmosphere heating up among the nation’s first-tier carriers-not to mention the importance they place on first-to-market-style announcements-than it reveals about the kinds of mobile experiences consumers and enterprise customers can look forward to next year.
In any case, there’s no dispute that the battleground is worth the fight. Mobile broadband offerings-enabled in part by carriers’ migration to so-called 3.5G networks-are where the nearly mature industry’s growth potential lies. CDMA carriers are expected to migrate to Rev. A and GSM carriers are shifting to HSDPA, all in hopes of capturing the imagination of a so-far under-whelmed consumer who awaits truly compelling multimedia content and of a nascent enterprise market looking to replicate wired office capabilities on-the-fly. Whoever wins, wins big.
Sprint Nextel, as it crowed about being the first American carrier to take the Rev. A plunge, spoke of extending its self-described “mobility leadership” with an aggressive rollout of Rev. A, which the carrier suggested would allow significantly faster upload data speeds than the EV-DO Rev. 0 network it continues to extend nationwide. Verizon Wireless, perhaps frustrated that another carrier would dare to grab the rhetorical high ground on its own branded value proposition of network quality, was quick to downplay both Sprint Nextel’s credibility and ability to perform a smooth rollout on its ambitious schedule.
Sprint Nextel’s Power Vision EV-DO service is expected to cover an estimated 190 million people nationwide by the end of 2006. The mobile broadband network currently covers more than 150 million potential customers and 470 airports around the country.
The carrier said its Rev. A upgrade would produce network speeds up to 10 times faster than current EV-DO network speeds, mostly on the uplink. Average download speeds, according to the carrier, would improve to between 450 and 800 kilobits per second. Average uplink speeds are expected to improve from 70 to 144 kbps to 300-400 kbps, with bursts up to 1.8 megabits per second. The carrier said it would launch commercial Rev. A services in first-quarter 2007, a full year away.
A recent mobile customer survey by the NPD Group found that Sprint Nextel had-at about 25 percent-the largest percentage of customers with data plans among U.S. carriers
Sprint Nextel plans to demonstrate a Rev. A PC card at the CTIA Wireless 2006 show in Las Vegas this week, with partners Nortel Networks Ltd., Novatel Wireless and Sierra Wireless. The carrier expects to offer the next-generation PC cards in the third quarter.
Verizon Wireless’ basic response to Sprint Nextel’s announcement? Good luck.
“The Rev. A stuff is all very interesting, but we know that this is technology that’s still in the oven, right?” said Ed Salas, Verizon Wireless’ vice president of network strategy and planning. “It’s not baked. We’re not going to provide a specific timeline for [when Verizon Wireless will announce the rollout of] a technology that’s not ready. The advantages to being first in the marketplace, for a lot of products and services, don’t matter. When it goes to your core asset, your true differentiator, which is the network, what matters is experience in the marketplace. Strategically, we have every intention of evolving to Rev. A.
“Sprint is claiming a timeframe that’s so far in advance of today that it’s a promise based on a sparkle in an engineer’s eye,” Salas added.
“I don’t want to send the wrong message here,” said Verizon Wireless spokesman Jeffrey Nelson, backtracking just a bit. “Obviously Rev. A is a very sound technology and where it’s going to go is important to every CDMA2000 operator. The issue is you want to do it right.”
Nelson said Verizon Wireless expects to receive hardware shipments for Rev. A testing this summer. “The initial hardware delivery that will commence later this year will be very limited in its functionality,” Nelson said. “That functionality will come over time with progressive software loads. With each one of those loads there’ll be additional testing required. You also have to go through the whole handset part of this. While Sierra Wireless and some others have announced pre-commercial PC cards-certainly that’s one way of providing the service-you still would need to ensure that those cards work with the upgraded software and then you evolve to more traditional handsets. So there’s a fair amount of testing that needs to be done. Typically there’s some refinement and patching that needs to occur to make it the commercial-grade service that we would want it to be.”
Apprised that Verizon Wireless had fired a shot across its bow, Sprint Nextel rapidly made available two executives to clear the smoke-filled air.
“It’s fair to say that we’re very focused on making sure that whatever we roll out is going to fit our customers’ needs and provide good, quality service,” said Vicki Warker, Sprint Nextel’s vice president for marketing effectiveness. “We’ve proven that over and over again and our growth pattern proves that. We’ve clearly tested Rev. A to know that it’s reliable and will be a good quality service in the timeframe that we’ve said we’ll roll it out. We’re very comfortable with the technology.”
According to Ron Wells, who is in charge of product marketing for mobile broadband at Sprint Nextel, the carrier has worked closely with its vendors to ensure the carrier could accomplish its stated intentions. “Obviously we weren’t first to market with Rev. 0,” Wells said. “About a year ago, we began laying plans for how we could be first to market with Rev. A. We’ve been very focused on taking this leadership position back. So I think what you’re seeing now is just a public statement, based on a lot of hard work, that actually started in the third or fourth quarter of last year. We’ve done a lot of work with our key vendors to make sure that Rev. A will roll out without a hitch.”
So much for the rhetorical parry-and-thrust.
For analyst Roger Entner, vice president for wireless telecom at Ovum, the announcement from Sprint Nextel draws an “it’s-about-time”-style response.
“Both companies are sourcing from the same vendors,” he said. “And those vendors cannot afford to upset either carrier. My expectation is that Verizon will roll out Rev. A at the same time as Sprint does.”
Some history is in order, according to Entner.
“The reason that Verizon was first with Rev. 0 is simply that they made the decision earlier. Sprint originally decided to go with EV-DV, and when that didn’t pan out, it switched to EV-DO. It’s a foregone conclusion that both carriers will do Rev. A-and it’s also a foregone conclusion that they’ll both go to Rev. B-in a roughly similar timeframe.
“It’s really nice that Sprint finally realized the wisdom of investing in the network. For several years, Sprint had chronically under-invested in its network. They had spent half of what the other carriers had done. Finally, this year, it is spending $5.7 billion-on par or more than their competitors have traditionally spent.”
Post-rollout differentiators between Sprint Nextel and Verizon Wireless?
“The quality of the coverage,” Entner said. “You have to recognize that Sprint has covered all of the U.S. and has licensed all of the U.S. Verizon, despite being the second-largest carrier, is not everywhere. That means that Sprint is no longer falling behind in the coverage and quality area.
“So Sprint’s announcement and intent to invest in its network intensifies competition; it closes the gap. It’s long overdue that they’re spending serious amounts on their network.
“This really puts pressure on T-Mobile [USA Inc.],” Entner concluded. “T-Mobile has to decide whether it’s going to do high-speed data and, if so, it has to get spectrum [at the upcoming federal auction] in June, or if they’re content to offer only cheap voice services.”
In the end, Sprint Nextel had its moment in the sun, and the carrier clearly is working to bring to market the other side of the equation-the actual service offerings to consumers and enterprise-momentarily obscured by the largely invisible world of network upgrades and the highly visible rhetorical skirmishing over those upgrades.
So what would Sprint Nextel like us to know about their intended offerings?
“One of the things we’re seeing on the business side is rapid adoption of mobilizing business applications-existing services that require speeds that Rev. A brings, on both upload and download,” concluded Sprint Nextel’s Warker. “Other services will be offered off our Business Mobility framework or some of the partnerships that we have to provide business services. On the consumer side, of course, we’re all about content and entertainment. We’ll continue to expand that content, which is bandwidth- and speed-hungry. So expect richer, more multimedia experiences on the consumer side.”
Looking ahead, Qualcomm Inc. already is finalizing standards for its inevitable Rev. B, which will offer even greater capacity and data speeds. If history is any guide, you can write the script for early announcements of the Rev. B rollout right now.
