Sprint Nextel set to roll out WiMAX: U.S. adoption rate remains to be seen

As Sprint Nextel Corp. and Clearwire Corp. gear up for an initial market launch of its mobile WiMAX network this month, the duo is under pressure to deliver on the fledgling technology.
Continuous delays in rolling out the technology have haunted Sprint Nextel. John Polivka, spokesman for Sprint Nextel, said the carrier recently announced news to debut WiMAX service in Baltimore in September, the first U.S. market.
“We are also planning to launch service in Washington, D.C., and then Chicago sometime in the fourth quarter,” Polivka said. “Sprint has additional markets in various stages of network development. These include Boston, Philadelphia, Dallas and Fort Worth.”
Sprint Nextel and Clearwire have touted WiMAX’s time-to-market advantage over rival LTE technology. Bill Ho, of Current Analysis, said the slow rollout has harmed Sprint Nextel’s reputation and puts pressure on the carrier to perform.
“Initially the hopes were by the summer and now it appears to be in September and that has been a disappointment which doesn’t help Sprint’s executions credibility,” Ho said. “Barry West, Sprint’s driver and the new Clearwire president, admitted that there have been backhaul issues. Of course, there are some other intangibles and potential issues.”
“Sprint has a significant position,” said Mohammad Shakouri, board member and VP of the WiMAX Forum. “It’s a big advantage when you think about how fast it is ramped up.”
For WiMAX and more generally, broadband, the biggest fundamental issue is spectrum, Shakouri said. He said that 30 megahertz of clean spectrum is needed to fuel a broadband highway, and with Sprint Nextel and Clearwire’s spectrum depth in the 2.5 GHz band, which reaches as deep as 200 megahertz in some markets, they’re revved to go.
In addition to its spectrum holdings, Sprint Nextel and Clearwire are also set to pocket $3.2 billion in investments from Intel Corp., Google Inc., Time Warner Cable, Comcast Corp. and Bright House Networks once their merger is approved.
International importance
Rolling out wireless broadband service in the United States may be a little more difficult because of the nation’s wired infrastructure, Shakouri noted.
“[In undeveloped countries], it’s a government priority,” Shakouri said. “Decisions with broadband are of national interest.”
Gerry Purdy, analyst with Frost & Sullivan, also noted WiMAX’s impact around the world.
“It’s doing quite well outside the United States as a network technology that can deliver network and DSL where there is none,” Purdy said. “But we, in the U.S. tend to think we’re the whole world.”
So what’s stopping the U.S.?
Purdy anticipates that because the Sprint Nextel/Clearwire partnership is still up in the air and the investment checks haven’t been cashed, the impact of the new Clearwire cant’ yet be measured.
“The new Clearwire is a company that hasn’t seen the light of day yet,” Purdy said. “The old Clearwire was able to do its own kind of rollout, but now it has all the Sprint WiMAX resources built into it. In 2009, we’ll see how that company takes the company and capital from Sprint.”
Questions remain
Another roadblock for any new technology is understanding how it behaves in a real-world environment. WiMAX is all about broadband; it’s not about creating new phones, Shakouri said. People and customers do not subscribe to WiMAX, their devices do, Shakouri said.
Although it’s been in trials and we know it will work, Purdy said WiMAX technology will not win people over until they can test it.
“We need to have an opportunity to see how these things will develop in the marketplace,” Purdy said.
However, Purdy continues to remain optimistic for WiMAX’s future, saying he loves to see new paradigm shifts and new technologies.
“It’s not fair to talk about failure,” Purdy said. “This is a case where WiMAX has some promising elements.”
Purdy went on to compare the launch of WiMAX to the launch of Wi-Fi. Many people were skeptical and didn’t have complete faith in the Wi-Fi technology, Purdy said. Eventually it caught on in stores, homes, almost anywhere, in what Purdy called “an explosion.” Shakouri keeps that same hope for the United States, knowing what must be done.
“Our only battle is the industry battle,” Shakouri said.