Sprint Says It Easily Will Exceed Buildout Requirements
Sprint Nextel easily will exceed 2.5 GHz buildout requirements set by the FCC as a condition of the companies’ 2005 merger, Sprint CTO Barry West said Thurs. WiMAX’s growing popularity will make devices that send and receive data wirelessly as ubiquitous as today’s cellphones, West told us. “The FCC wanted something they could put in [the merger order] that helped justify the merger… to the public at large. This was an easy give for us,” West said: “We don’t have to build out until 2009 and we don’t have to build out anything near the footprint that we're planning to build.”
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Sprint plans to launch WiMAX by year-end with a larger roll-out offering service to at least 100 million people by year-end 2008. The first computers with embedded WiMAX chips are expected next year. West predicted WiMAX will transform access to the Internet, just as cellphones changed how people use phones. Many 5 year olds have cellphones and when kids draw pictures showing someone talking on the phone it’s always a mobile phone, he noted.
“A lot of people don’t understand. They think this is just another mobile technology,” West said. “We even called the business unit the ‘4G business unit’… In the same way that mobile voice grew the overall voice business about 300% we believe that mobilizing the Internet will grow the Internet.”
The 3G service offered by Sprint, AT&T and Verizon Wireless won’t spark the degree of change WiMAX will, West said. “1X EVDO is a great product, but it doesn’t have the kind of innate capacity that we need to be able to sell the service at a rate at which people will say I'm fine with this, I'm willing to have this as my primary access to the Internet, not as an add on,” he said: “That’s what mobile WiMAX brings.”
West said Sprint Nextel’s 2.5 GHz spectrum holdings will give it a huge edge over rivals. The company has more than 90 GHz of capacity in 85 of the top 100 markets -- about twice as much spectrum as rival Clearwire. “Some really major players around the world are looking at the WiMAX model… but you've got to have the spectrum,” he said: “Quite frankly, a lot of our competitors just do not have the kind of spectrum you need to deliver this model.”
Competitors could catch up by making a big play in the coming 700 MHz auction, but West questioned whether the 60 MHz to be sold, split among carriers, will offer enough spectrum for WiMAX. The spectrum has other hobbles; its propagation characteristics make adding base stations more complicated.
“The great thing about 700 MHz spectrum is it goes a long way. The problem is it goes a wrong way,” West said: “As soon as the demand comes up, the only way you can build capacity is to add more sites -- cell splitting. The problem is the 700 MHz radio waves go beyond their target cell and they start causing interference.”
West said his company’s rivals have underestimated WiMAX. “The great news is our competitors don’t believe in the market,” he said: “This is a bit like the push-to-talk thing we did at Nextel. People thought that was quirky and that there were half a million customers that really wanted push to talk. We've got over 20 million push-to-talk customers who use it everyday.”
The Wall Street Journal reported Thurs, that Sprint may form a partnership or joint venture with Clearwire or seek cash from cable providers as it builds out the spectrum. Sprint had no comment.