SPRINT NEXTEL CORP. HAS WATCHED its self-imposed deadline for a commercial WiMAX network launch slip by as backhaul and billing systems appear to be causing greater headaches than originally expected.
The carrier planned to commercially launch its Xohm network in Chicago, Baltimore and Washington, D.C., sometime last month, but pulled back on those plans at the WCA 2008 convention a couple of weeks ago. Following live demonstrations of the service in the streets of the nation’s capitol, Xohm President Barry West took the opportunity once again to talk about the technology’s inherent characteristics, which he and Sprint Nextel believe put it ahead of Long Term Evolution, the only other major contender for next-generation networks at this point. (AT&T Mobility and Verizon Wireless support LTE.)
Delay brings questions
Although the No. 3 carrier has soft
launched its Xohm service and is reporting progress on the development of the larger WiMAX ecosystem, this latest delay has caught the attention of analysts, who are increasingly dubious about Sprint Nextel’s future overall.
“When Sprint comes out and says we’re having problems with backhaul . you have to step back and say ‘wow, why didn’t you think of this ahead of time?'” said Peter Jarich, a principal analyst at Current Analysis, who’s been critical of Sprint Nextel and its technology choice in the past.
“They’re sort of the face of WiMAX. If things don’t go well, what does it say about the technology?'” he added. However, Jarich did give Sprint Nextel points for being straight forward on the issues, rather than keeping everything close to its chest. A wise move for a company that’s been blamed for the poor financial performance of many companies in the past couple weeks, he said.
“Sprint’s got other problems and I think people recognize that,” Jarich said.
Fiber, microwave options
Doug Smith, chief technical operations officer for Xohm, said complexities surrounding zoning and leasing are affecting how quickly Sprint can secure sufficient backhaul since T1 lines, which have traditionally been used by the wireless industry for backhaul, won’t meet the need.
“Imagine throttling a fire hose down to a garden hose,” Smith wrote in response to questions.
He said the company is looking at a pair of options for backhaul: fiber from alternate access vendors and microwave, both of which are less expensive on a per-megabit basis.
“The challenge is there’s not a lot of fiber options to cell sites where we need it, so we are seeking out the best options as needed. While keeping an eye on the infrastructure economics, we are taking the time necessary to do this the right way,” he wrote.
Current Analysis’ Jarich said he doesn’t understand how Sprint Nextel “misread the situation and didn’t know it was going to be that hard.” After all, they’ve been building networks and dealing with cellular backhaul issues for years, he pointed out.
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Still, Jarich’s not sure the delay is a big problem for the carrier at this point. “You don’t want to look bad by being late, on the other hand how bad do you look?” he said. “If they do it really well . then there’s still a chance to impress people and make people forget a little bit about the delay.”
Still, when he takes calls from Wall Street types who ask him how serious and committed Sprint Nextel is to the success of its entirely new WiMAX network, he advises them to measure progress based on the carrier’s own comments.
“You have to look for benchmarks,” he said. “Do they hit the first benchmark of having something launched in 2007? Do they have commercial services launched in early 2008?”
The carrier has its initial markets up and running, but commercial availability is still in the offing.
Sprint Nextel told RCR Wireless News it has no update as to when the service will be commercially, but said it might offer an update in its earnings call May 12.
Billing challenges
Beyond backhaul, Sprint Nextel is also having problems setting up billing systems for a new business model it’s been developing for WiMAX.
“We are only slightly off schedule. The self-provisioning system is a new development, with which we are doing a lot of testing to provide customers with the best options and experience. The testing (with employees) is going well,” wrote Atish Gude, senior VP of mobile broadband operations at Xohm.
“Remember, there are multiple chipset types, various access devices and multiple infrastructure vendors within the WiMAX ecosystem. Those different moving parts all come together in the provisioning and billing systems. The network is therefore working with many variables. This is one facet of the open Internet,” he added.
Sprint Nextel has not announced pricing plans, but said it’s studying options, which include a “home and away plan,” day passes and bundles for numerous devices. “Xohm will have subscriptions, not contracts,” Gude said.
