Sprint Nextel ‘4G’ modem arrives amid raves, concerns: Network speeds get thumbs up, but analysts worry over WiMAX buildout costs

Sprint Nextel Corp. announced its first “Sprint 4G” device, a CDMA/WiMAX modem that will go for $150 with a two-year service contract. And at least one reviewer appeared impressed.
“We were blown away with the results,” wrote Gary Krakow of TheStreet.com.
Further, Krakow said the modem, made by Franklin Wireless, is easy to use and noted it was faster than using a similar USB modem on AT&T Mobility’s HSDPA network.
The new device will hit Sprint Nextel retail shelves on Dec. 21. Service will cost $80 per month, which represents a $20 premium over what Sprint Nextel charges for access on its CDMA network.
“We pulled into a parking spot in Baltimore’s Inner Harbor area, opened up the laptop and turned on the modem,” Krakow wrote. “First try; we were greeted with data download speeds of more than 6600 Kbps. That number is four to five times as fast as the best 3G speeds we recorded and 50% faster than Sprint claims it will go.”
Sprint Nextel said users should see speeds on WiMAX of 2 – 4 megabits per second, while its CDMA network users should see speeds of 600 Kbps – 1.4 Mbps.
Sprint Nextel’s “4G” service works through a mobile virtual network operator agreement with Clearwire Corp., which is taking the lead in building out WiMAX across the country.
Indeed, Clearwire has its sights set on Portland as its next WiMAX launch, for next month.
However, the WiMAX rollout may face some tough challenges, according to a report in the Wall Street Journal. Even though Clearwire received $3.2 billion from investors, the report said analysts foresee Clearwire needing $3 billion to $5 billion more to complete the network.
Chris King, analyst with Stifel Nicolaus, said Clearwire may have to beg investors for more money if credit markets don’t improve, the report said. Further, King predicts Clearwire will lose $688 million in 2008 and won’t see profit until 2015.