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Sprint's Big Deal: New Life for WiMax

Tom Evslin

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. 

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Re: Sprint's Big Deal: New Life for WiMax Dan Campbell  –  May 07, 2008 7:43 AM PDT

"Assuming the deal is for real" are the key words.  This has been on again off again more than a Hollywood romance. It seems like every few weeks I pick up the paper and see that this deal is back on or back off.  It would be good for Sprint (not to mention broadband subscribers), to give Sprint a boost to bounce back from their mobile service issues and the fallout from the Nextel merger, which still isn't over.  But we'll see what the paper says in a few weeks…

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