Sprint’s Big Deal – New Life for WiMax

The Wall Street Journal is reporting the terms of a yet unannounced deal which will finance a massive rollout of WiMax by a Sprint-Clearwire joint venture. Outside funding is to be provided by Intel, Google, Comcast, and Time Warner Cable as well as Bright House, a small cable company. Assuming the deal is for real, this is good news for US users of broadband and, indirectly, other users around the world.

WiMax can be used to provide both fixed and mobile voice and data services. Data speeds are up to eight times better than Verizon's EVDO (also currently offered by Sprint) and AT&T's HSPDA. Both AT&T and Verizon plan to rollout faster access – but not for another couple of years. WiMax is in use today; all it takes is money to roll it out. But it does take lots of money; the price of WiMax devices won't come down and WiMax won't be built into cellular handsets until there's some assurance of a broad market for it. That broad market is what this money provides.

Part of the WiMax promise is that it can be used both for residential and roaming data service. It's much faster than most DSL and better than what's available from cable companies today in most of the country. That means both your phone and your laptop may both connect in the same way at home, in the office, and on the road – if only someone has the money to build a national network. Now someone does.

The US broadband market needs more competition. Sprint has shown its willingness to compete on price with its flat rate unlimited voice and data plan. Now it'll be more than competitive in technology as well – at least for a while. Sprint is also active as a wholesaler supporting local providers of cellular service (as well as Amazon's Kindle). That means more marketing muscle than just Sprint alone selling this new service.

The companies providing the money are companies that have a stake in the outcome:

Intel has invested huge amounts in WiMax technology; for a while it looked like the technology might not ever get to market massively enough to get Intel's customers, the device makers, to incorporate it.

The cable companies have been offering fixed voice and Internet access for a while. But they haven't had a way to offer cellular service or mobile data. They will be able to resell Sprint's network. I'd look for that to happen in a big way. Cablecos may even use WiMax to reach subscribers who are expensive to run cable to.

Google has an interest in making sure that there are lots of competing pathways between their huge databases and those who search them. Monopoly providers would surely try to put toll booths on the search path and tap into Google's revenue.

Related posts:

Why WiMAX?

WiMAX vs. WiFi

Should a Cellular Carrier Be Your ISP ...

Google's Gigabit Gambit

 

 

 

 

Comments

[Tom Evslin]

Brough:

Thanks for commenting. I'm glad that you're optimistic as well and agree with the points you made in the post on your blog.

[Tom Evslin]

Jake:

I agree that WiMax will end up serving the voice as well as the data market and will bring mobile voice prices way down.

I know you've worked long and hard at making service available where no one else seems to want to go. I hope you'll keep at it. My guess is that there'll be good exits even for those who don't reach profitability as larger access providers do realize that they have to serve every nook and cranny. There's certainly more realization that government has a role to play.

And the percentage of takers'll continue to go up as broadband becomes a necessity.

All easy for me to say at a time when I know that capital is also very hard to come by and postive cashflow difficult to achieve.

[brough]

Tom, coincidentally this announcement comes immediately after T-Mobile USA's launch of 3G service in the NYC area. That's on the spectrum they won in the 2006 AWS auctions. T-Mobile USA should be built out in 25 markets by year end and mos tof the country by the end of 2009.

So, with Clearwire driving the WiMAX rollout, and barring consolidation, by 2010 we should have five competing national mobile networks capable of multi-Mbps down and multi-hundred-Kbps up. Typically four real competitors is enough to guarantee robust competition, so things are looking very good for much of America. (Yes, I concede rural Vermont may take a bit longer...).
http://blogs.nmss.com/communications/2008/05/us-mobile-inter.html

[Jake Marsh]

Hi Tom, nice article. I am glad to see WiMAX progress being made. Despite being way over hyped in the press, this technology is clearly going to be the future of wireless broadband and mobility. I still believe WiMAX networks will eventually send cellular systems to the Smithsonian :)

My primary reason for writing is to ask your opinion on the future outlook for independent broadband service providers. Over the last few years there have been a number of small companies growing wireless infrastructure and deploying DSL services, which have made it possible for many folks to get high speed service when no other options besides satellite were available. But it seems like none of them have yet reached that critical mass necessary to be considered a viable part of solving the broadband dilemma. What is your take on where things are likely to go? Should these small business owners look for greener pastures in a different part of the industry or should they redouble their efforts to gain territory, subscriber base and most importantly political support?

Hope you are enjoying this great spring weather. Look forward to your response.

Best regards,
Jake Marsh
Island Pond, VT