SPRINT NEXTEL CORP. PLANS to turn on three WiMAX test markets within the next two weeks, meeting its self-imposed deadline to roll out the technology by the end of this year.
Sprint Nextel spokesman John Polivka confirmed that “several hundred” company employees will begin participating in the soft launch by Christmas, using data cards to test out the capabilities of the fledgling WiMAX network.
The carrier had long planned to turn on the network in the Chicago and Baltimore/Washington D.C., markets by the end of 2007, and those plans are holding up despite Sprint Nextel’s operational troubles and the collapse of a deal with Clearwire Corp. to accelerate the deployment of a nationwide WiMAX network.
The soft launch will occur in two stages, according to Polivka: The first phase involving several hundred employees will start in the next few weeks, followed by a second stage during early next year that will expand the number of participants.
A commercial launch is set to follow, with embedded WiMAX devices expected to appear later in 2008, Polivka said.
Finding the right course
Since the departure of former CEO Gary Forsee in October, Sprint Nextel has said it remains committed to WiMAX-but at the same time is re-evaluating the business. CFO and acting CEO Paul Saleh told investors at a recent conference that the company still expects to reap benefits from the launch. However, he said the carrier would revisit its WiMAX-related guidance for 2008 to make sure “that’s the right course for us.”
Saleh indicated Sprint Nextel is considering options such as forming a separate WiMAX company and finding investors to fund the network deployment.
Despite the on-time soft launch, some observers expect to see mobile WiMAX deployment delayed in the U.S., as Sprint Nextel struggles to re-focus its efforts on its core business and stem its wireless customer losses.
Philip Marshall, VP of the Yankee Group’s Enabling Technologies/Service Provider group, said he expects the deployment of WiMAX by Sprint Nextel “will be slower than what was originally planned, and will focus a little bit more on the . portable as opposed to fully mobile solution.” However, he pointed out that the company has to meet regulatory requirements. As part of Sprint Corp.’s acquisition of Nextel Communications Inc., the company is supposed to cover 100 million potential customers using the 2.5 GHz spectrum by the end of 2008.
Bigger issues
“Beyond that, Sprint has bigger issues to resolve with its core business, around customer care, churn reduction and improvement of its CDMA and iDEN business units,” Marshall said-and noted that the company also still lacks a COO and is searching for a CEO.
Marshall said that he believes Sprint Nextel’s WiMAX business “is better suited as a stand-alone company,” but that the carrier faces a tough choice between looking short or long term with the technology.
“On the one hand, in the short-to-medium term, Sprint needs to clean up its existing business, and WiMAX is acting in many respects as a distraction from that,” Marshall said, adding that the company lacks much support from the financial community for its WiMAX investment. However, he said, Sprint Nextel’s competitors are looking to triple- and quad-play bundles, including broadband service, to attract customers. “The flip side is to say Sprint needs this so they can include decent broadband service in the bundle.”
Research firm Pike and Fischer said in a recent report that “despite some deployment hurdles, mobile WiMAX will hit the market much sooner than competing fourthgeneration . solutions being embraced by Verizon Wireless and AT&T” and offers faster network speeds. The firm predicted that Sprint Nextel “will continue to invest heavily in building its own WiMAX network, despite recent financial troubles,” but that the number of WiMAX-enabled devices and the quality of the service will be critical components.
Forward progress
In a separate announcement, mobile WiMAX chipset provider Beceem Communications said that it had successfully completed initial interoperability testing between its chipset and Sprint Nextel’s WiMAX infrastructure as part of Sprint Nextel’s Xohm launch preparations.
Xohm is the brand given to Sprint Nextel’s WiMAX efforts.
Lars Johnsson, VP of business development for Beceem, said that the milestone is evidence of the “hard work that’s really going on in silence” as development of WiMAX continues.
