Sprint Nextel Pins Hopes On WiMax - InformationWeek

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Sprint Nextel Pins Hopes On WiMax

The company continued to lose revenue and subscribers in the fourth quarter, but believes its growing 4G network will help turn it around.

Sprint Nextel executives resembled circus jugglers as they reported the company's fourth-quarter financial results, revealing subscriber and revenue losses, the continued drag of its Nextel legacy, and hopes that its WiMax wide area rollout will be a hit with customers.

The nation's third-largest mobile phone provider said it lost a net 148,000 subscribers and its revenue dropped from $8.43 billion to $7.87 billion.

The company, however, is betting on its majority ownership in Clearwire's 4G WiMax, which has been rolling out in a few selected markets including Baltimore, Portland, and Atlanta, covering 30 million people. Sprint CEO Dan Hesse said the wide area WiMax technology will be deployed this year in Boston, Houston, New York, San Francisco, and Washington D.C. metropolitan areas. The new deployments are expected to cover 120 million people by the end of 2010.

Most of Clearwire's existing WiMax subscriptions are for fixed connections, but in a meeting with analysts Wednesday, Hesse indicated that portable WiMax will be important.

"Internally we call 2010 the year of 4G," he said "It's going to be the year that we're the only game in town and it's a combination of we need to get more markets turned up and we need to get a better device lineup and then we think we can really start to show some sizable progress...

"We think mobility is absolutely crucial," he said, noting that Sprint, as a primarily mobility company, is placing its emphasis on dual mode 4G/3G. "It just takes awhile to build out a 4G network so we would expect that you would see more [points of presence] being expanded in 2011 and then 2012 so this would be a continuous process like so many generations are."

Hesse said its Clearwire investment partners including Comcast, Time Warner, and Bright House will likely play important roles in promoting bundles with WiMax.

Asked about the current merger and acquisition discussions and negotiations sweeping through the mobile carrier industry, Hesse said "some consolidation" would be healthy for the industry, although he said he couldn't comment on any specific talks Sprint might be involved in. Pre-paid provider Leap Wireless and T-Mobile USA are separately discussing mergers and acquisition activity and Sprint has often been suggested as a possible partner.

At the same time, Sprint's acquisition of Nextel continues to be a challenge for Sprint, even though it has written off most of the $30 billion-plus acquisition. Hesse said Sprint is still working with the Federal Communications Commission and public safety organizations so Sprint can avoid being forced to vacate Nextel iDEN channels. Hesse said, "We do expect that the process could take longer than planned, but our expectation is that we will work very closely with public safety and the FCC toward a solution that makes sense for everyone."

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