Deadline for WiMax cable investors passes without much fanfare

Sprint officials still optimistic about Xohm

Sprint Nextel Corp.'s deadline for cable companies to commit potentially billions of dollars to a joint WiMax venture came and went Monday during the CTIA Wireless 2008 event with barely a sneeze.

Sprint CEO Dan Hesse and WiMax Xohm division President Barry West both told attendees Tuesday that they were still optimistic about rolling out the technology beyond trial markets in Chicago and Washington.

In a brief interview at a reception for analysts and reporters on Tuesday evening, West said he remains "optimistic" about Xohm, adding that so many WiMax-equipped devices have been evaluated that Sprint has had to close down a review pipeline in Herndon, Va., for the time being.

Asked if many visitors to CTIA had expressed concerns for Xohm's future in light of news that Sprint is still seeking investors, West said "not really." He and other Sprint officials declined further comment on talks with investors.

A person familiar with the talks, who asked not to be named, last week said Sprint had pressured Comcast Corp. and Time Warner Cable Inc. to commit to funding up to $1.5 billion by yesterday prior to the opening of CTIA. That person's comments confirmed what others have told The Washington Post and The Wall Street Journal.

But despite continuing internal optimism at Sprint, several visitors on the show floor at CTIA wondered if the Xohm effort could fail due to lack of investor money and a leadership change at Sprint in recent months, as well as a major restructuring at Motorola Inc., a developer of WiMax gear for Xohm.

Xohm partners, including Motorola and Nokia Corp., attended the Xohm reception and said that WiMax is an important technology that will move ahead in the market even if Xohm fails. "WiMax is more than just Xohm," said Keith Nowak, a Nokia spokesman, in an interview. "If anything happens to one effort [such as Xohm], that doesn't shut down the WiMax concept."

Analysts noted that WiMax is already being rolled out commercially by Clearwire Corp. in the U.S. and that trials and deployments are under way in Russia, outside Paris and in other locations globally. Philip Solis, an analyst at ABI Research in New York, said that since Sprint's financial stability is in question and investors have not yet materialized for a Xohm joint venture, Sprint's rollout timeline for Xohm will "certainly" be delayed.

Yet Solis was not sure the Monday deadline was a hard one, and he noted that it was in any case self-imposed. "Sprint has the vision, but the only thing lacking is financial backing," Solis said. "It sounds like they are close to a deal, and there's a lot of potential with WiMax."

Concerns about Xohm's viability have led to comments that a competing technology called LTE (Long Term Evolution) will win out, partly because it won't cost its backers as much as WiMax will cost Sprint and its partners. "But LTE is not radically cheaper," Solis said. He and other analysts said that Sprint could be "working out the kinks" in Xohm before a full launch.

Solis said that if the lack of investors leads to a failure of Xohm, there would not be the massive rollout of the WiMax technology as once envisioned. "It would mostly be built in developing countries," he added.

Copyright © 2008 IDG Communications, Inc.

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