Sprint Nextel and its hardware partners today sought to convince a small audience at the Consumer Electronics Show that their WiMax plans are on track, despite the recent departure of Sprint's CEO and the dissolution of its partnership with Clearwire.
"We are exactly where we said we'd be," said Barry West, Sprint Nextel's CTO and president of the company's Xohm WiMax business unit. Sprint is in the process of soft launching in Chicago and Baltimore, he said.
Executives from Nokia and Samsung said they both expect to have user devices ready for the second quarter launch. In addition, Motorola said it is working on a device that will operate over Sprint's EV-DO (Evolution-Data Optimized) cellular network, Wi-Fi and WiMax.
Since the ouster of Gary Forsee, the former CEO and chairman of Sprint Nextel, who was thought to be a champion of the company's WiMax plans, onlookers have speculated that the network might not roll out as planned. In addition, Sprint Nextel ended a partnership with Clearwire to jointly deploy WiMax, a further cause for uncertainty. Sprint has been hemorrhaging mobile subscribers and recording declining revenues since its purchase of Nextel.
Beyond the unrest internally at Sprint, the company faces critics of WiMax who say that the technology won't work as well as cellular technologies in a mobile environment and that it won't support international roaming as easily as the cellular standards.
But in describing the reasons why Sprint chose WiMax and why it intends to aggressively pursue the network, West further sought to soothe market qualms about the future.
"Being first to market is a huge advantage," he said. "And WiMax technology is here, now and mature."
While an investment in a totally new technology requires a strong reason for change, this won't be the first time Sprint's doing it, he noted. WiMax doesn't follow on the upgrade path for CDMA (Code Division Multiple Access), the basis for Sprint's cellular network, so it requires a totally new network.
Sprint did that first when it moved from an analog cellular network to digital, West said. The same went for the move to third-generation technology, although in that case Sprint stuck with the CDMA path.
Sprint also considered LTE (Long Term Evolution), a fourth-generation mobile technology, but one big disadvantage is that it's not yet available, he said.What's Involved
Moving to WiMax represents a shift to a new air interface technology: OFDM (Orthogonal Frequency Division Multiplexing) instead of CDMA, which is the basis of the current 3G technologies. According to West, when CDMA is deployed in a wider section of spectrum, which helps boost throughput, the computational complexity required goes up exponentially. That requires higher performance chips which come with a steep price tag, he said.
With WiMax, Sprint plans to use a wide section of spectrum that can dynamically switch from carrying data up or down, depending on user requirements, he said.
Beyond the radically different network technology, Sprint envisions a very different business model than cellular, one that will support any kind of standard device.
"Look at the cellular model. It was very successful but also very frustrating," West said. He was referring to the business model in the U.S. where operators subsidize phones and then require long-term subscriptions from users.
With Xohm, Sprint will allow any WiMax-compliant device to run on the network, he said. End users will buy the devices themselves, probably at a variety of retail stores and hopefully for a low price because vendors expect the cost of WiMax chips to drop dramatically, like Wi-Fi. "Since I've got no money in you, I don't need a contract," West said. That opens the door to a wide array of new pricing scenarios. End users could pay for the day, week, month or on a regular subscription, he said.
While West declined to cite specific prices, he said a monthly subscription to Xohm will be comparable to existing DSL (Digital Subscriber Line) rates.
Initially, Sprint will sell PC cards and modems but by the end of this year as many as ten different kinds of devices could be available, he said. Navigation and gaming devices are possibilities, he said.
If the market has any doubts about Sprint's plans for the network, it should rest assured that regardless, the future of WiMax isn't uncertain, panelists said. "WiMax is bigger than Sprint," said Sriram Viswanathan, vice president and general manager for Intel Capital and for Intel's WiMax business.
Motorola alone has 17 contracts for networks and is involved in 60 trials, said Fred Wright, senior vice president and general manager at Motorola. "This technology is real, it's not a fairy tale," he said.