Sprint Nextel Calls on WiMax for 4G

August , 2006

Can 100 million people in the U.S. have 2 to 4 Megabits per second wireless broadband by 2008? Sprint Nextel is saying yes. Today it announced plans to deploy Mobile WiMax (802.16e-2005) equipment starting immediately. The company is calling it “4G,” for “fourth generation.”

The move will be hugely beneficial for companies like Intel and Motorola, which are heavily backing WiMax technology, enough so that they’ve invested hundreds of millions already in Clearwire’s deployment of WiMax. Clearwire has licenses to install the technology in enough small markets to land as many as 90 million potential wireless broadband customers. Intel, Motorola and Samsung will provide equipment for the Sprint build-out, and have pledged to help push creation of third-party devices to take advantage of the network.

ABI Research senior analyst Phil Solis said in a statement that WiMax could be very cellular-like because “Clearwire and Sprint will be able to leverage each others’ 2.5 GHz spectrum holdings to increase their coverage. Even more important, the satellite TV providers will benefit from a developing WiMax ecosystem in the United States as they consider their options to leverage a WiMax network. DirecTV will have more options available, and less-expensive base stations and devices at its disposal.”

ABI believes the U.S. will now be part of a growing, global belt for wireless broadband roaming.

Strategy Analytics issued a new report called “Capitalizing on WiMAX: The Market for WiMAX Radio Chips,” that says things are less uncertain for WiMax equipment makers now that certification testing is underway by the WiMax Forum, but cautions that “equipment shipments will not reach tens of millions of units per year until after 2010.” That statement may have been made before the Sprint announcement, however.

Sprint will use its holdings in licensed 2.5 GHz spectrum — the largest chunk of licensed spectrum, around after Sprint’s merger with Nextel — to build the network, which it says will cover 85% of U.S. households in the top 100 markets, similar to how it and the competition at Verizon Wireless rolled out EV-DO 3G networks. Sprint’s WiMax network will be a complement to the EV-DO. Part of the approval of the Sprint/Nextel merger last year was a requirement that it use the 2.5 GHz spectrum for deploying broadband services. FCC expectations at the time were that 15 million Americans would have service by 2009. Sprint apparently wants to surpass that, aggressively.

The company says the 4G roll-out will necessitate a new business model to make sure the deployment goes fast. They’ll spend $1 billion by 2007, and up to another $2 billion by 2008 on the deployment.

To no surprise, the WiMax Forum issued a statement applauding the move by Sprint Nextel, calling it “a watershed moment for the WiMax Forum and the fast-growing WiMax ecosystem.” The Wireless Communications Association (WCA) offered similar congratulations, saying the enabling factor of the announcement was a series of regulatory victories made by the WCA with the Federal Communications Commission, specifically the use of 2.5 GHz for widespread wireless deployments. Before the FCC’s new 2.5-2.7 GHz order made in April of this year, the deployment might not have been possible.

Mobile WiMax/802.16e equipment is currently not certified by the WiMax Forum, but that hasn’t stopped its deployment. Seoul, South Korea has a substantial network set up there under the name WiBro.