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Sprint Details Mobile WiMAX Plans

We just sat in on the Sprint’s conference call, which brought together Sprint Nextel CEO Gary Forsee, Motorola’s Ed Zander, Intel’s Sean Maloney and Samsung’s KiTae Lee. Here are the details.

Sprint confirmed it has chosen mobile WiMAX as the technology for its 4G network and says it will spend between $2.5 billion and $3 billion on capital expenses by 2008. The company says it is working with Intel, Samsung and Motorola, though didn’t specify how much additional money each of those companies is investing in the plan.

Sprint executives said the network will offer between 2 to 4 Mbps, and will be launched in the Q4 2007, with a nationwide rollout in 2008. With that much bandwidth available, Sprint executives referred to a network that will be built to run user-generated content, and enabling subscribers to access “YouTube and MySpace on the fly.”

Sprint detailed some of the reasons for its mobile WiMAX choice, and said the company can create a “mobile WiMAX ecosystem” with 4 times the performance and a tenth of the cost of a technology like EVDO. In a call after the conference Sprint phrased the benefits as providing ten times the combined performance and cost saving over other available networks, but wouldn’t clarify more on this somewhat confusing metric.

All of the cheering on the call was of course at the expense of Qualcomm, which Sprint did not choose for the 4G network, and which builds a business off of owning proprietary IP standards and a closed model. Sprint said Qualcomm’s tech was not chosen for technical differences, among a variety of reasons, and emphasized its interest in mobile WiMAX as a global standard with a business model for building an ecosystem.

No surprise that Intel’s Maloney emphasized these thoughts in the conference, as did Samsung’s Principal for wireless broadband North America, Tom Jasny in a call after the conference. Jasny put it as “an open standard contributes to large adoption, helps the fundamental economics and encourages countries to make the standards available.” Qualcomm’s stock fell $2.71 after the call to $33.66.

While Sprint’s partners didn’t detail their commitments too much, Sprint VP of Broadband Bin Shen said to us after the conference that a major portion of the deal with be an agreement on marketing — which Intel learned from WiFi can be pretty expensive — as well as network deployment and operational support. Samsung Jasny said its partnership could include chips, network infrastructure, and consumer electronics, including handsets, computer cards among other devices.

Sprint’s Shen said there would be announcements with major partners in the coming months. We’re wondering how Clearwire will fit in? Investors weren’t too confident in the announcement and Sprint Nextel’s stock fell almost 2%.

16 Responses to “Sprint Details Mobile WiMAX Plans”

  1. Jesse Kopelman

    Laurent, Motorola does indeed have a 2.6 GHz Mobile WiMax product. It is not commercially available yet, but then again nobody elses is either and they won’t be until they get certification at some point (still no hard dates yet). I don’t have indepth info on this product, but the claim support for pretty much ever WiMax associated buzzword including both MIMO and AAS smart antenna technologies. As far as I can tell, the Nextnet acquisition was solely to get the customers (Clearwire and others) and ensure Moto’s position as the dominant WiMax vendor in North America, not for any Nextnet tech.

  2. Laurent

    Sprint has choosen Intel, Samsung and Motorola as technology partners.

    1) Intel makes sense has they have been on the forefront of WiMAX Rev E since the beginning and they hold the key to its success (Shipping Intel Rosedale 2 as early as possible and convince Laptop suppliers to integrate).

    2) Samsung is easy to figure out as well as they are also on the forefront of WiMAX with WiBro in Korea and they have already handsets available that they have trying to promote outside Korea for a while. Getting these hadnsets to work on a slighty different WiMAX Profile (2.5Ghz, 5 or 10Mhz sub-carrier) might not be that difficult.

    3) Motorola. Here I am a bit puzzled. Motorola AFAIK does not have a WiMAX Rev E solution in 2.5Ghz which is the reason they acquired Clearwire’s subsidiary NextNet Wireless recently.

    The NextNet acqusition might have just be driven by Sprint project. But again Motorola seems far away from having a proven Rev E solution.

    Maybe there will be some clarifications later as to who is doing what in that deal. Or maybe somebody here can help.

  3. The Clearwire gang must be celebrating the Sprint announcement. Both companies will benefit from price decreases in wimax infrastructure due to greater scale, plus Clearwire has a two year head-start in building out the network and the proven ability to raise the capital necessary to fund future build-out. Will Sprint need to buy Clearwire once they miss their build-out milestones? Will TMO or DTV scoop Clearwire up to fill even bigger strategic holes in their spectrum/service portfolio?

  4. Jesse Kopelman

    I’m sure there will be VoIP over WiMax. If it doesn’t come from Sprint and other carriers it will be avialable via Skype, GTalk, et al. It will be a long time before all wireless calls are over VoIP, though. I don’t see GSM and CDMAONE disappearing overnight. Hell, not even all wireless calls are digital yet.

  5. Slacker711

    Intel definitely comes out ahead on this deal, but Samsung and Motorola look like they are going to clean up. Sprint is talking about $2.5-$3 billion in capex to cover 100 million POP’s. That is an absolutely huge amount of capex considering the fact that Sprint already has 50,000 base station sites. Add in the fact that multimode devices are going to be required and you get a very lucrative revenue stream for Samsung and Motorola over the next few years. This deal legitimizes both companies next-gen network strategies.

  6. I’d be absolutely stunned if this actually rolled out in 2008. 3G is barely off the ground, and we’re lead to believe that they’ll crank 4G WiMAX technology out in less than two years? Not likely, IMNSHO.

  7. Lucent is the No.1 CDMA switching equipment vendor, so Lucent will also be on the loosing side with this announcemnt if Sprint is buying from Lucent. Will this impact Alcatel-Lucent merger? There have been concerns over the merger after Lucent announced gloomy results few days back, and news about bleak future for CDMA. Also some of Asian, particularly Indian CDMA operators are building GSM overlay networks.

  8. Biggest winner is Intel. They have been the PR engine behind WiMAX/WiMAX Forum. They developed the story of the ecosystem and lined up all the big named companies to join. They are the chipset vendor of choice not only for WiMAX mobility for traditional ‘cellular’ devices but also into the consumer electronics play down the road.

    2.5GHZ spectrum is far from nationwide for Sprint. True on Clearwire as potential roaming partner when they deploy .16e. Lookee up north in Canada and in Mexico – all with WiMAX plays happening.

  9. WIMAX is VoIP. VoIP is Sonus, pretty much. Motorola and Samsung both work with Sonus. I would think Sonus could be a winner, perhaps indirectly, here as well.

    [I am a biased observer with a stock position in Sonus]

  10. Jesse Kopelman

    The way I see it, there are 3 obvious winners here and none of them are Sprint (not that they are looking bad). The first winner is Motorola, who looks to have taken a huge early lead over rivals such as Ericsson and Nokia and is in a good position to stave off the coming threat of AlcateL(ucent). The second winner is Samsung, who is right now the biggest WiMax player from a global perspective and can make the most compelling argument that the are The Leader, when dealing with emerging markets (which is a far bigger play than the US in the long term). The third winner is all the small-time players who have already deployed WiMax (well preWiMax and upgradeable to WiMax really) in the 2.6 GHz band. These guys now have the potential to craft nationwide roaming offerings for their customers. They also get a good outlook for an exit plan, as sooner or later Clearwire or Sprint will look to gobble them up, which means it should be easier for them to raise money to continue to build out their regional networks.