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3/24/2009
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Sprint May Rent Excess Network Capacity

The company could use its data network to provide Internet connectivity for devices from SanDisk, Garmin, and Kodak.

Sprint may be making a stronger push to rent out its excess network capacity to consumer electronics manufacturers, according to published reports.

The third-largest U.S. cellular carrier continues to struggle with maintaining subscribers, as it was the only major player to have a net loss of customers last quarter. But the carrier does own a broad swath of spectrum, and it's reportedly in talks with the likes of Garmin, SanDisk, and Eastman Kodak about equipping devices with wireless Internet connectivity.

This wholesale approach is already in action with Amazon.com and its Kindle line of electronic book readers. Dubbed "Whispernet," Sprint's network handles the over-the-air download of e-books, and the carrier collects a fee depending on how much data is used.

The wholesale market may make up an increasingly larger part of Sprint's business, as its number of wholesale subscribers has risen 27% since 2006. Much of this can be attributed to the rise of Virgin Mobile USA, which uses Sprint's network to be a mobile virtual network operator.

This approach does have some drawbacks, though, as wholesale revenue is generally not as large as direct-to-market sales. Additionally, creating an Internet-connected device can be a difficult task for some manufacturers.

"For every five companies that come in and say, 'I've got this great idea,' only about one actually gets done," Jim Patterson, Sprint's president of wholesale services, told The Wall Street Journal.

Rivals AT&T and Verizon Wireless have taken steps to use their data networks in similar manners with devices like netbooks and truck trackers. This strategy will probably play a larger role with the next generation of mobile broadband, as WiMax and Long Term Evolution networks will offer massive amounts of bandwidth.


InformationWeek has published a comparison of LTE and WiMax that may shed some light on this issue. Download the report here (registration required).

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