Analysis: Sprint's WiMax shines on price, but not on coverage

IDG News Service - Prices and terms for the WiMax service that Sprint Nextel launched on Monday in Baltimore compare well with other wired and wireless broadband options, but a key measure -- coverage -- remains a question mark.

The Xohm service is the first national broadband service in the U.S. using WiMax high-speed wireless technology. The new service in Baltimore carries a $35-per-month regular price for home broadband and costs $45 per month for mobile use. (Introductory monthly rates of $25 and $30, respectively, will last for six months.)

That's for a service with download speeds between 2Mbit/sec. and 4Mbit/sec., comparable with many DSL and cable modem services in the U.S. A major advantage of WiMax is that customers can buy a mobile client device and use it on the road wherever the network is available. Pricing is based on the devices customers use, so those who only buy and register a large, tabletop modem can get the less expensive home plan. They can, however, travel with that modem and set it up elsewhere in Xohm's service area if they choose.

If Sprint's speed claims are accurate, WiMax is something new in the Internet-access market: Internet access that can take the place of DSL or cable and also travel with users.

In an initiative that will start in Portland, Ore., Clearwire is rolling out its own WiMax network, and it will be combined with Sprint's after the companies finish forming a joint venture later this year. Verizon Wireless and AT&T Mobility expect to start deploying another fourth-generation (4G) technology, LTE (Long-Term Evolution), within the next couple of years and they're speeding up their 3G networks in the meantime.

Although Xohm waves the mobility flag high, it will probably rely on stationary home users for its early success, analysts said. The problem is that roving users will find it available in just a few places. Baltimore is the only commercial market for Xohm now, and just two more cities -- Chicago and Washington, D.C. -- are scheduled to come online this year. Even the coverage in the Baltimore area -- which Sprint lays out in an interactive map on the Xohm Web site -- is patchy, and it doesn't look like Xohm will be available in most of the area until late next year. However, most of downtown does seem to be covered now.

The lack of coverage makes it hard to fairly compare Xohm with cellular data offerings, analysts said. That's the multibillion-dollar challenge for Sprint and its partners.

"The cellular guys have been able to do it because voice has been paying the bills ... and it's been 20 years since the cellular people came out," said In-Stat analyst Allen Nogee. Despite a joint-venture deal that brought together $14.5 billion from a consortium of manufacturers and service providers, Nogee isn't sure Sprint and Clearwire will be able to build out a strong national footprint given the trouble in today's credit markets.