Q&A: Why Sprint is bullish on its WiMax gamble
Claims low prices, first-to-market advantage
Computerworld - Sprint Nextel Corp. calls it a vision; others call it a gamble.
Sprint announced in August that it is building a $3 billion nationwide mobile WiMax data network. It said it will start offering the network, which will be faster and cheaper than its existing 3G EV-DO (third-generation Evolution Data Optimized) cellular data service, to users by the end of next year.
Peter Cannistra, Sprint's director of mobile broadband strategy.
While Sprint claims that its vision for this network is compelling, many industry analysts and observers question whether it will attract enough customers to be successful. The skeptics also say the new network is redundant to Sprint's 3G network.
"The WiMax effort is something Sprint could win very large at," said Derek Kerton, principal of The Kerton Group, a telecommunications consultancy. "Or it's something they could lose very big at. If they succeed, it's something no other carrier in the U.S. can replicate."
That's because Sprint inherited the wide swath of wireless spectrum on which it is basing its network when it merged with Nextel in 2005. None of its competitors has nearly as much spectrum, so if Sprint's WiMax network succeeds, those competitors won't be able to match it.
That's one of many reasons that Sprint is bullish about its WiMax network. Computerworld spoke with Peter Cannistra, Sprint's director of mobile broadband strategy, who acknowledged that the company is taking a gamble, but said it is certain the gamble will succeed. He also discussed the impact of the network on enterprises and whether it will conflict with Sprint's 3G network.
How much of a gamble do you think your nationwide WiMax deployment is? It's true that there is no business case that has no risk. But we view this more as an opportunity than a gamble, the opportunity to be first to market with a true wireless broadband, multidevice value play for the consumer. We think we have a tremendous time-to-market advantage. The analogy is that we see there's a $10 bill on the ground, and we're going to get it before anybody else.
Given your spectrum situation, though, nobody else could pick up that figurative $10 bill. Our risk mitigation is our spectrum situation, yes. That and the choice of WiMax and the powerful ecosystem of world-class partners. So, again, we see this as a tremendous opportunity in which we we have tremendous advantages.
What is the network rollout schedule? We'll have two markets by the end of 2007. They'll be top-10 markets. The network will cover 100 million people by the end of 2008, and 170 million people by the end of 2010. We have the option to accelerate that if the market supports it.
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