Sprint Flips the WiMAX Switch
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Sprint (NYSE: S) launched its new 4G Xohm (pronounced "Zoam") mobile broadband WiMAX network service in Baltimore today, along with four service plans to entice users to sign on.
The launch represents the culmination of at least two years of investment in the WiMAX 802.16e wireless networking standard -- often as critics called it an unproven technology.
WiMAX, or Worldwide Interoperability for Microwave Access, is based on the 802.16e standard and offers a transmission speed more than five times faster than current wireless networks.
Sprint said it chose Baltimore as a starting point for several reasons.
"It is a well-defined market that will allows us to validate our business case and test and refine marketing messages," said John Polivka, a spokesman for Sprint Nextel Xohm. He said the WiMax network encompasses about 70 percent of the Baltimore population.
Polivka said the service would complement current data access services offered by Sprint.
"We kept our promise to launch Xohm WiMAX in September," Polivka told InternetNews.com. Polivka said the project involved building two networks (a service network as well as a backhaul network) and implementing new back office programs to support billing systems and customer care.
"Customers can buy devices in retail outlets and online and self-activate them, choose services without lengthy contracts, and bundle many devices under one user plan," he said of the different rate plans offered with the WiMax service.
The carrier is banking that the faster data network will boost its 51.9 million customer base and help regain and expand beyond the nearly 2 million subscribers lost in the past year.
The high-speed data network is the latest market move by the third place carrier to grab greater traction against market leader AT&T and second-place carrier Verizon Wireless, and shore up disappointing earnings reported in August. The Overland Park, Kan.-based carrier experienced an 11 percent revenue drop, to $9.06 billion, in the second quarter and a loss of $344 million, or 12 cents per share, during the second quarter compared to the second quarter of 2007.
Sprint's market resurgence plan began this year with an all-you-can use rate plan deployed in February and a major customer service program, ReadyNow, launched last month.
If You Build WiMAX, Will They Come?
Analysts think there is enough demand for WiMAX services to support the investments in infrastructure. WiMAX subscribers are predicted to increase worldwide from 3.40 million to 27 million by 2011, according to a January 2007, Yankee Group report.
The initial service plans include a $25 monthly home subscription, a $30 'on-the-go' plan and $10 day-pass program. Users can also choose a $50 monthly service option that allows use of two different WiMAX devices and unlimited data usage for life.
According to Sprint, users can purchase XOHM-branded Samsung Express air cards for $59.99 and ZyXEL modems for $79.99 in order to enable the WiMAX access.
No WiMAX handsets are yet on the horizon, though Sprint has said a dual-mode 3G/4G device that will work on the current Sprint NOW network and the new XOHM network is slated for the fourth quarter of this year. For now, Xohm customers can use Internet telephony services, such as Skype, on the network, Sprint said.
Additional WiMAX devices arriving this year including a ZTE USB modem, Intel Centrino 2 WiMAX notebook PCs and the Nokia N810 WiMAX Edition.
The XOHM network debut arrives two years after Sprint initially formed a WiMAX partnership with Intel, Samsung and Motorola. Nokia, Nokia Siemens Networks, Google, ZTE and ZyXEL have also joined the effort.
Sprint plans to move its Xohm WiMAX network into a new WiMAX company it's forming with Clearwire (NASDAQ: CLWR). The $14.5 billion joint venture for creating a national WiMAX carrier is expected to be approved by regulators by year's end.
Next up as new WiMax areas are Chicago and Washington, DC. Sprint said both are nearing final stages of network readiness but declined to state when commercial service will begin. The carrier is also developing networks in Boston, Providence, Philadelphia, Dallas and Ft. Worth.