Global Insight Perspective | |
Significance | The long-awaited commercial launch of the Sprint WiMAX network, vaunted as a rescue remedy for the troubled carrier, is finally here. |
Implications | With no innovative devices and limited coverage, this launch is something of a damp squib, although future developments should help to deliver the network's potential. |
Outlook | The tie-up with Clearwire may provide an opportunity for Sprint to really launch the service, but LTE technology-based networks are due to be rolled out by Verizon in 2010, offering a narrowing window of opportunity for the WiMAX network to gain a foothold. |
Sprint has announced the first commercial market launch for the Xohm WiMAX network in Baltimore (Maryland, U.S.). This just meets the delayed launch target of September 2008—the commercial launch had originally been targeted for the first half of 2008, with the Sprint network covering a population of 70 million under the original agreement with Clearwire (see United States: 19 June 2008: Sprint Ready to Launch WiMAX in September; 3 April 2008: Sprint Delays WiMAX Launch; and17 August 2007: Sprint Releases Plans and Targets for "Xohm" WiMAX). The soft launch and testing have reportedly been ongoing for the last year and delays were largely ascribed to backhaul and customer-management issues. However, a number of deals have been struck recently that should have helped to mitigate these problems (see United States: 24 April 2008: Sprint CTO Defends WiMAX and Blames Backhaul for Delay; 23 September 2008: Sprint Taps Ciena for Ethernet Backhaul on WiMAX Network; 10 July 2008: Sprint Taps DragonWave for Microwave Backhaul in WiMAX Network; and 15 July 2008: Sprint Taps MFormation for Mobile WiMAX Device Management). There may also have been issues with end-user equipment contributing to the delayed launch, although these would appear not to have been resolved.
The network is due to be merged with that of Clearwire under a new agreement that also includes equity investment from existing Clearwire shareholders Intel, Google and several cable companies. This was agreed in May 2008, although the deal has still to clear regulatory hurdles, with a court case from Sprint's affiliate, iPCS, an additional sticking point (see United States: 8 May 2008: Sprint Confirms Details of WiMAX Joint Venture and 17 July 2008: Sprint Set for New Case with Affiliate iPCS Over WiMAX Plans).
- Price: Sprint is using the new data-centric service to move away from the subsidised handset model towards a retail 'consumer electronics' model. The service will be available without contract commitments, with monthly and day-pass plans available. Multiple WiMAX devices can be supported by a single monthly tariff and devices are activated and updated over the air. One day's access is priced at US$10, home internet is US$25 per month, while the monthly 'On the Go' service will cost US$30 per month. While Sprint describes it as supporting multiple devices through one account, the description of launch prices as a US$50 "Pick 2 for life" tariff covering two different devices is a distinctly underwhelming implementation of this. No mention is made of wholesale opportunities for connecting other types of consumer electronics devices, such as the Amazon Kindle eBook (see United States: 27 November 2007: Kindle Sets New Model for Data-Connected Devices).
- Services: Users will access an internal portal that offers "enhanced mobile services" where services from the agreed partners, including equity investor Google, can be found (see United States: 29 August 2008: Sprint Signs Up LBS Partners for WiMAX). A customisable widget-based portal, called 'My Xohm', will contain the user's selection of services. The choices are primarily location-oriented services and entertainment content, as well as security, hosted storage and interactive communications.
- Devices: At launch only two devices will be available: Samsung Express air cards and ZyXEL modems. Intel is another investor in the project to the tune of US$1 billion, along with a number of other network investments globally. Notebook PCs using Intel's integrated WiMAX chipset are a major part of the plan, but Intel was delayed in its own targeted launch for integrating WIMAX with Centrino 2 chipsets and as a result these are not yet available (see World: 16 July 2008: Intel Launches Centrino Chipsets, But WiMAX Is Not Yet Inside). Nokia has been looking to Intel to provide the 'Baxter Peak' WiMAX chipsets that would power its Nokia 810 WiMAX-edition internet tablets. With no news forthcoming since the announcement last year, it looks as if similar chipset issues have affected the launch of what would have been the network's flagship device (see World: 27 September 2008: Nokia Dials Intel for Mobile WiMAX Chips). Sprint notes that these are still expected later this year, along with a USB modem from ZTE.
Outlook and Implications
With a population of just 637,000 in the city of Baltimore and 2.6 million across the metropolitan area, Sprint has a long way to go to reach a significant scale for the new network. This is an important limiting factor, but Sprint notes that it will release a dualmode 3G/4G device in the fourth quarter that will help to mitigate this, while the Clearwire combination, which is still expected to close in the fourth quarter, will significantly expand the 4G network. However, the launch lacks the lustre for which Sprint will have sought and it can only be hoped that the close of the combination with Clearwire will provide a new opportunity for Sprint to really launch the network with new devices and reach (see United States: 3 September 2008: New Markets Slated for Sprint's Xohm WiMAX Launch).
The lack of eye-catching devices to showcase what the new network is able to do will also be a major blow, particularly as Sprint has built up momentum with talk of an 'ecosystem' of connected devices. As it is, the network is currently only able to offer fixed and mobile broadband services to plug in modem devices. Speeds of 2-4 Mbps, rising to 10 Mbps, are reported in an interview with Lee Mellon, a Sprint field technician, in USA Today. This is more than double that of 3G networks and should be sufficient for bandwidth-demanding video-streaming applications. Verizon has targeted a 2010 commercial deployment for LTE technology, which signals that there is only a slim window of opportunity for the network—and the technology—to gain a foothold in the United States (see United States: 7 April 2008: Verizon Details Spectrum Position).