Sprint Faces WiMax Challenges, Despite Growing Device Availability

Sprint Xohm CTO Barry West stood Wednesday before an audience in Baltimore and cut through a long rope of twisted pair cable, symbolizing (he said) the dawn of the mobile broadband age and the emergence of WiMax as a live technology in the United States.

The reality is more complicated, but on this day anyway, Sprint and its partners were out in force with new WiMax products and optimistic forecasts.

Last week, Sprint began offering WiMax service to Baltimore, the first city in what Sprint says will eventually become a nationwide mobile broadband network, and the company Wednesday held a celebration of sorts to kick off the $5 billion, multiyear initiative.

"The United States has made a major step toward a mobile broadband network," West said at the event. "It means everything will come with WiMax. Xohm will extend the home and office Internet experience to anywhere."

At the event, four notebook manufacturers (Toshiba, Asus, Acer, and Lenovo) launched new WiMax-enabled notebooks, while Sprint announced plans for a service and devices available later this year that would allow customers to roam between its current 3G network and the new WiMax network, Xohm, likely for an additional fee. Sprint also said that Dell, Panasonic, and Sony would be shipping WiMax-enabled devices by next year.

Despite the deepening global credit crisis, Sprint CEO Dan Hesse said Sprint's WiMax plans remained intact. The company already has raised $3.2 billion from investors to build the network, though it will cost an estimated total of $5 billion. "Capital's a good thing to have these days," Hesse said. However, it's obvious Sprint is still looking hard for the rest of the money, as CTO West joked that if there were any investors in the audience who wanted to infuse some cash, they should see him.

Sprint chose to launch its network in Baltimore because the city posed some unique challenges, such as an abundance of water and thick brick buildings. However, it also represents an opportunity to build a lucrative market early, since it's right next to Washington, D.C., which will be among the next few cities to get Xohm. Sprint has put up 180 WiMax towers (antennas, really) in Baltimore out of a total of 300 that will be built there, and said that early take-up has been faster than expected.

Several more cities will get Xohm soon if Sprint stays on track. Next up after Baltimore are Washington and Chicago by the end of the year, with Boston; Providence, R.I.; Philadelphia; Dallas; and Fort Worth to follow soon thereafter. West noted that some blogs have discovered the ability to sign on to the Xohm network early in a few of those cities. If a proposed joint venture with Clearwire goes through by the end of the year as Hesse said today he expects, the network will grow further: Clearwire has already built out a pre-WiMax network in smaller cities around the country and will add significantly to the amount of spectrum available to Sprint. For its part, Sprint struck a competitive tone. "What do our competitors answer with?" asked West. "Nothing. They'll have nothing for two years. We are the only company with the assets available now and the services ready today."

But Sprint needs to move fast if it is to keep itself competitive with coming Long Term Evolution (LTE) technology that's been embraced by AT&T and Verizon Wireless, which are the two largest wireless carriers in the country ahead of Sprint and T-Mobile. Though the technology lags behind WiMax in maturity and won't be available for at least two years, LTE would be an upgrade of the current cellular network, rather than requiring a whole new network to be built. That's one reason Sprint's merger with Clearwire is vital for success.

Both WiMax and LTE are based on the same underlying technology, called Orthogonal Frequency Division Multiple Access, but there's no planned interoperability between the two. "It's a bit of a religious debate at this point," says Fred Wright, senior VP of home and networks mobility for Motorola, which will manufacture equipment for both technologies.

Sprint and its partners also need WiMax's price to stay low if they intend to be successful. West estimates WiMax chips can be available at the same cost as Wi-Fi chips, and Xohm costs roughly the same as fixed broadband from traditional ISPs and is cheaper than some existing 3G services.

A large ecosystem of available products will be another key to WiMax's success. Lenovo today launched the ThinkPad X301, T400, SL300, and SL500 and said the ThinkPad W500, W700, SL400, X200, and IdeaPad Y530 are on the way soon. Asus has the F8Va-C2WM for $1,599 and the N50Vn and M50Vm, both from $1,399. Three more Asus WiMax laptops are due by the end of the year. Acer is offering the Aspire 4930-6862 and 6930-6771, both for $899.99. Finally, Toshiba introduced the U405-ST550W and said it will add more notebooks to the WiMax lineup as coverage expands.

Most of the laptops made available Wednesday were aimed at consumers, but Panasonic said it will likely have business and government in mind with the laptops and devices it has due out next year. In addition, Panasonic executives said in an interview, the company is in early discussions with Sprint about other consumer devices like cameras that it could WiMax-enable in the future.

In addition to laptops, Xohm devices like modems and ExpressCards will be available through independent retailers, select Best Buy stores, mall kiosks, online through Sprint and partners like Nokia and Newegg.com, as well as via telesales and door-to-door salesmen.