Xohm exec details WiMAX pricing strategy, discusses usage rules

CHICAGO – Day two of WiMAX World 2008 brought Atish Gude, senior VP of mobile broadband operations for Sprint Nextel Corp.’s Xohm effort, to the stage to discuss the business of WiMAX. And for Xohm, freshly launched in Baltimore this week, Gude said the goal is to lower barriers to entry for customers.
Gude indicated four key hurdles including number of devices, long-term contracts, affordable pricing and utility.
On pricing specifically, Gude compared Xohm with the pricing strategy in the wireless industry’s early days, which continues to today. He explained the stair-step method, whereby customers’ increasing usage convinces them to upgrade to a larger bundle.
“It’s a strategic method to get users,” Gude said. “[But] there have always been low-end plans.”
As such, Xohm offers a day pass for $10, allowing customers to experience all-you-can-handle mobile WiMAX for 24 hours. Then, if users like what they experience, Gude said they can step into monthly or even yearly plans.
“Having a day pass is similar to those creative plans to facilitate usage,” he said.
Xohm’s initial launch offers include home service, on-the-go service, a Pick 2 plan for multiple devices and the day pass.
–Home Service requires an $80 modem with unlimited WiMAX for $35 per month, or $25 per month for the first six months as part of a promotion.
–On-the-go service features a $70 card alongside service for $45 per month, or $35 per month for the first six months.
–The “Pick 2” deal, normally sitting at $60 per month, has a current promotion that will provide users with $50 per month pricing for life, as long as they purchase the two devices: a modem and air card.
–And the day pass costs $10.
As far as capping usage goes, Gude said that Xohm mobile WiMAX is open and will not restrict usage as long as there’s no congestion on the network. However, when congestion appears, that will change.
“We have to apply certain rules to protect our customers,” he said. “[It’s] the rights of many vs. the rights of few.”
Gude assured the audience that the WiMAX business model will drive a whole new source of revenue to the wireless industry.
Admitting that WiMAX has a long way to go, Gude said Xohm has proved that the network is usable, and that when addressable markets are expanded, revenue will pour in.
“At the end of the day, that’s what this business is about,” he said.