When Sprint CEO Dan Hesse (right) headlined CTIA Wireless 2008 this week as a keynote speaker, one of the most anticipated nuggets of information — in addition to Hesse’s plans to turn around the company’s cellular business — was to hear if Hesse had made a final determination on what he will do with Sprint’s nascent WiMAX division.
From his comments, it’s clear that Hesse will not shut down the Xohm WiMAX business unit or sell it off in a fire sale, but the door is still open for a joint venture or a spin-off. Some observers were hoping to hear a joint venture announcement after recent rumors of a renewed Clearwire deal and that Comcast and Time Warner Cable were interested in joining the WiMAX partnership as investors, but nothing official was announced at CTIA.
“We expect to have at least a two-year time-to-market advantage” in mobile broadband. That was Hesse’s assertion at CTIA, so it looks like he’s still thinking of Xohm as part of the Sprint family of products. He believes that WiMAX will give Sprint a strategic advantage because of the “wireless data rush” that cellular companies are facing.
Interestingly, at Sprint’s earnings call in February, Hesse characterized it as an “enormous asset — nearly 100 megahertz of unutilized spectrum — and the opportunity to have a three-year head start with our Xohm (mobile WiMAX) service.” I’m not sure why Sprint’s head start went from three years to two years in month’s time, but I suspect that the 700 MHz spectrum licenses recently won by Verizon and AT&T might have something to do with it.
Xohm launch date
Another thing that analysts and reporters were hoping to hear from Sprint at CTIA was that the official launch of Xohm in its first two major markets — Washington D.C. and Chicago — was still on track for April. Sprint did not make an official announcement about the Xohm launch, but Unstrung reporter Dan Jones ran down Sprint CTO Barry West, who confirmed that Xohm will miss its April launch date.
“We’re continuing to add sites every week,” said West. “So we’re making progress toward our launch but we’re not announcing a launch date. We’re not quite ready yet… I was targeting my team for April. It’s clear that April doesn’t work now.
“We’re reassessing when that should be, but it’s not because of any major issues. It has much more to do with logistics and what we have to do. We kind of underestimated some of that, particularly in building the backbone to the sites. If you don’t have broadband backhaul, you lose the benefit of high speed on the actual WiMAX network. Those things have been quite challenging. We’ve got our heads around it now and we’re working through building out the network. ”
InfoWorld reported additional details about Sprint’s WiMAX backhaul problems, pinning the problems to the cost and availability of leased lines such as T1, DS3, point-point microwave, fiber optic cable, and Ethernet. Carriers such as Sprint have to establish these lines at each WiMAX site in order to provide the Internet backbone. If you don’t provision it correctly or try to do it on the cheap, you can end up like the Buzz Broadband debacle in Australia.
Bottom line for IT leaders
Sprint’s WiMAX announcements, or lack thereof, at CTIA were a disappointment. The only good news was that Hesse is not looking for a quick exit strategy on WiMAX. The Xohm WiMAX launch won’t happen in Washington, D.C., or Chicago in April. Nevertheless, it does appear that Sprint is coming down the home stretch and will still launch WiMAX in 2008, kicking off a new era in mobile broadband and mobile data services for road warriors. But in order to build out a nationwide WiMAX network, Sprint will likely need help from multiple investment parters like Intel and Comcast.