For Sprint $3B x 4G = Triple Play

$3B x 4G = Triple Play

September 12th, 2006

In a bold move to capture the high ground in next generation mobile network deployment, the recently merged Sprint Nextel Corp (Reston, VA; www.sprint.com) announced it plans to develop and deploy the first 4G nationwide broadband mobile network. Based on WiMAX technology, this watershed development will enable one network to deliver voice, video and broadband Internet access.

Steve Sechrist
Senior Analyst and Editor
of Projection Monthly

Sprint has also secured significant industry partnerships with the likes of Intel, Samsung and Motorola, to build the infrastructure needed and to develop handheld chipsets to operate on the network. To deploy the system, Sprint says it will spend over $3B in 2007 and 2008, seeking to reach up to 100M customers. The company may eventually spend $4.5B for the total build-out.

Sprint says it plans to use its extensive 2.5GHz spectrum holdings to deploy the technology, giving the company coverage in over 85% of the US households in the top 100 markets.

Prior to this announcement, Clearwire, backed by wireless pioneer Craig McCaw and receiving support from chipmaker Intel, was the WiMAX front-runner. Some analysts believe the Intel investment in Clearwire precipitated the Sprint move. Until then, the company was in negotiations with Qualcomm over the use of its proprietary Flarion vintage of mobile OFDM (Orthogonal Frequency Division Multiplex Access) technology, developed by Flarion Corp. (Bedminster, N.J) and acquired by Qualcomm last summer.

Our take: The announcement gives a major boost to WiMAX supporters and could be the fly in the ointment for Clearwire’s plans to offer a last mile solution set to break the broadband duopoly of cable and DSL. But, if there is a silver lining for Clearwire it’s the proliferation (and subsequent price reductions) of chips and compatible consumer devices this deal will no doubt stimulate.

Finally, placing WiMAX on the deployment fast track can only be good news for broadband customers looking for an economic alternative to duopoly pricing. –SS

Note: an expanded version of this story will be available in this month’s edition of Insight Media’s Mobile Display Report newsletter.