October 27, 2008

WiMax Revolution: Sprint's Hesse Savors Break from Wireless Pack

Sprint Nextel's risky bet on WiMax technology to fuel its next-generation "4G" network was no accident, insisted Sprint CEO Dan Hesse on Fri. At a speech before the National Press Club in DC, Hesse said the carrier's embrace of WiMax—perhaps most on display through its proposed Clearwire acquisition and partnership with Comcast, Time Warner Cable and Bright House —will put it ahead of bigger competitors like Verizon and AT&T, which back still-gestating LTE wireless technology. "The key for WiMax was time to market," he said during the Q&A portion. "We see it as an opportunity to differentiate Sprint. We intend to be the leader in wireless data." He said WiMax will allow Sprint to "do some things [Verizon and AT&T] can't do" such as work with CE manufacturers to spur WiMax-enabled devices not tied to any set contract or service plan. Hesse sees consumers able to connect on a per-minute or per-day rate—similar to how they now can use WiFi networks scattered around the U.S. Many audience questions were political in nature. Asked what a new President could to help spread rural broadband, Hesse jokingly suggested WiMax subsidies but later circled back to say he was only "half joking." Pointing out that wired infrastructure is cost prohibitive in many rural areas, he said the private sector would need "some form of subsidy mechanism to make [wireless broadband] happen." Meanwhile, Hesse said he fears that a Democratic administration might push for new net-neutrality rules (Democratic candidate Barack Obama supports net-neutrality measures). "Regulating the Internet has really horrendous implications," said Hesse. "Once it starts, where is it going to end?" — Not everyone shares Hesse's enthusiasm on WiMax. IMS Research believes mobile WiMax tech involving Sprint/Clearwire and its cable investors won't achieve maximum market thrust, but instead will encounter trouble gaining traction and become nothing more than a niche offering. Although the Sprint/Clearwire jv already has the tech operational in Baltimore, well ahead of the expected availability of chief tech rival LTE in '10 or '11, IMS said this first-to-market advantage will be minimal. AT&T and Verizon's LTE 4G trials will begin next year, VZ pres/COO Denny Strigl recently said. WiMAX and LTE will both see some success, the firm said, but achieving mass adoption of the former will be challenging.