As Ericsson Exits, Sprint Reaffirms WiMax Strategy

Sprint Nextel provided an update on its planned $3 billion WiMax network build-out and named several new launch cities, including Boston, Denver, and Minneapolis.
Since networking company Ericsson confirmed last week that it has shut down its R&D effort for WiMax, there's been plenty of gloomy chatter about the prospects for the mobile broadband technology. Enthusiasm remained undampened at CTIA Wireless 2007 in Orlando, Fla., however: a panel discussion on "WiMax: The State of the Technology" drew a standing-room-only crowd on Tuesday afternoon at the peak of the show.

On Monday, Sprint Nextel provided an update on its planned $3 billion WiMax network build-out, naming several new launch cities including Boston, Denver, and Minneapolis, and saying that Samsung and ZTE will provide PC cards for the 2008 debut of the service.

"Recent developments attest to the viability of our strategy," said Barry West, president of 4G mobile broadband [i.e., WiMax], who spoke on the CTIA panel, "as more companies align with our vision and apply their expertise to the momentum building behind Sprint WiMax services."

That momentum is hard for some observers to discern after Ericsson said on Friday that it had shut down its WiMax development unit to concentrate on 3G cellular technology and the mobile broadband road map known as Long-Term Evolution. Ericsson's Mikael Persson, manager of strategy and business development for WCDMA, had some dispiriting words for WiMax, which is based on the 802.16 family of standards from the IEEE.

"We've invested in the basic research, but we don't see the point in taking that final investment to prepare factories ... because we don't see the volumes in the market." Persson told Unstrung, adding, "I don't understand how this [WiMax] market will survive."

Another pothole in the road to WiMax has been the discouraging performance of Clearwire, the WiMax startup founded by wireless pioneer Craig McCaw and funded by industry heavyweights Intel and Motorola (who, it should be noted, also are key suppliers to the Sprint initiative). Clearwire shares have lost 21% of their value since the company's March 8 IPO.

None of this has altered Sprint's timetable or cooled its ardor for the WiMax network it announced last August. Noting the response at recent trade shows including 3GSM in Barcelona, and here at CTIA, Sprint Nextel VP for global broadband strategy Don Stroberg tells InformationWeek, "We're very excited about all the attention it's been getting."

Indeed, as Stroberg points out, Ericsson's decision to dump WiMax, which he says Sprint was aware of for some time, may have been largely driven by business factors rather than technological barriers.

"The European equipment providers like Ericsson have a lot of sunk investment in WDCMA [technology]," remarks Stroberg, "and they'd like to see that investment pay off as much as possible."

Ericsson has been candid in the past about its concerns that WiMax might cannibalize its existing WCDMA business, and by abandoning WiMax it frees up resources to concentrate on the Long-Term Evolution for future mobile broadband deployments.

LTE, however, is considered at least two years away from offering actual customer services. Sprint is sticking to its timeframe for a "soft launch" by the end of this year and commercial service in at least 19 markets by mid-2008.

"We are already testing equipment," West asserted at yesterday's panel. It "will be fully stable and deployed to 100 million [points of presence] by the end of next year, and there won't be a sign of any of these other technologies."

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