Barry West, president of Sprint Nextel’s new 4G Broadband Business and the company’s CTO, joined Nextel in 1996, following more than 35 years at British Telecom, where he oversaw the launch of its GSM digital cellular networks that spread like wildfire across 90 percent of the U.K. in only nine months.
With his position in Sprint Nextel’s Mobile Broadband Group, he will push mobile WiMAX as the next big thing in 4G wireless data communications.
West recently talked with internetnews.com about the challenges he faces as Sprint Nextel’s go-to WiMAX guy and how that effort will impact cellular and other wireless communications technologies.
Q: A lot of people see mobile WiMAX as a threat to cellular. If this is so, doesn’t this create a problem for Sprint Nextel’s core business?
A lot of people think of them as contending. I actually think it’s natural for the mobile operators to go there because you have to have access to a lot sites to support a mobile broadband experience. So, if you are coming from the mobile side, you already have those assets, and now you are on a marginal cost basis, so your cost structure is infinitely better.
Q: But doesn’t this create a problem when the consumer must select the better and more cost-effective technology?
Customers don’t care about technology. They care about what they have to pay and all the rest of it. Technologies come and go. We had first-generation analog systems, and they were marvelous when there was nothing. Then digital came along and improved on the analog. And third generation came along, which gave a much wider data channel and coincidentally improved the economics of narrow-band voice services as well.
The next natural evolution is to a true broadband channel, because a broadband channel will support the lower cost.
Q: Could this create a perfect scenario for a price war with your competitors, even before the technology is widely accepted?
I think the problems that our competitors have is they really don’t have enough spectrum. We have the advantage of lots of spectrum, and we also have the advantage of infrastructure. We’ve chosen a technology that is not fully baked, but it’s close enough to what you need to do. So we can be in the market with a real offering, starting the fourth quarter of next year and really building through 2008. In my view it will be at least two years before our competitors get there.
The secret sauce is in all the relationships you’re building as you build the new channels to market and you build all these new revenue opportunities. And the first-mover advantage is probably the most important thing.
Q: What are some of the challenges in balancing Sprint’s 2G and 3G network efforts and the emerging 4G initiatives? Are there substantial politics to overcome?
We’ve already solved the problems of merging the services in the 2G world. In the 3G world it’s about to get really easy because 1X-EVDO Rev. A will support a true Internet protocol, and then 4G will come in as IP. So, handing over between 3G and 4G will be a slam dunk. It took nearly two years of development to build the gateway between the 2G platforms, and I have no equivalent problem to that bridging 3G to 4G.
Q: Does this mean that 3G IP is temporary and will not be needed as 4G kicks in?
No, you build the 4G networks where you have high-density demand, and where there is low demand you fall back to 3G networks. So think of 3G as the foundation network, and then as you need more capacity, you look to 4G in the core of your network.
Q: One other pioneering problem, or at least in championing a new technology, is that the promise is often a few steps ahead of the reality. In this case, it is the handsets and devices that are compatible with mobile WiMAX technology. Do you see this as a roadblock for Sprint Nextel?
I don’t think we’ll bump into that one because we’re already seeing devices being developed in parallel to the infrastructure. And the infrastructure is starting to look more like a device. There is a lot of proliferation of vendors in the WiMAX world. We wanted to work with tier-one vendors, like Intel, Motorola, and Samsung, who are clearly top vendors. But we are also working with smaller companies, and a lot of innovation will come out of these smaller companies. There is a whole ecosystem in existence now.
A lot of people think we are pioneering this technology. Actually, we are not pioneering it because the technology is pretty mature. The revolution started before, and we’re just writing the constitution.
Q: What will it take to really jump start the industry with actual Mobile WiMAX deployments and widespread use, perhaps ahead of the current timetable?
Well, Phillips recently made an announcement that they will produce a $15 WiMAX chipset. This is an incredible price point, and that’s at low volume. We’ll see other vendors coming out with low-priced chipsets. Once you get down to $2 or $3 on the bill of materials for a TV set or a printer, you’re packaging is costing you more than that. So, it’s a no-brainer; you just put it in and it enables all sorts of services.
For example, on a TV set, the manufacturer of that device can reach into that set to see if its performing OK, and they can increase customer retention by providing services remotely. Likewise, printer people can provide services that allow you to distribute your copy from that device without connecting it to your computer.
Q: It seems, then, that WiMAX might play an important role in embedded control applications.
Exactly. And this has never been a part of the cellular world because of the whole subsidy model that says you have to keep your customer close since you’ve spent a lot of money in acquiring that customer. And because of that, you can’t allow them to walk away and do what they like.
Q: Has Sprint Nextel learned some lessons from the cellular world and its own activities in customer retention that might be applied to WiMAX as well? Or, is it a whole different ballgame in terms of applications and content?
There are new ways of approaching content and advertising, and different ways of monetizing the experience. The bottom line is that you are not providing a dumb pipe, but you’re providing a smart pipe. I know every bit that goes over my network. I know where people are and what their state and presence are, so I have the opportunity to deliver applications tailored around people’s needs.
It’s a bit like TiVo. It’s annoying, but the damn thing learns really quickly what you like.