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The Wall St Journal reports that Sprint Nextel is looking at financing options for WiMax service: The company has committed $3b to the rollout, and may need to spinoff the WiMax unit and form a partnership with Clearwire. That would provide a massive amount of licensing power, and vastly reduce the competitive framework between the two operators. Sprint might also create a “more modest partnership” with Clearwire. Sprint might also look for outside financing, notably from MSOs (multiple system operators, or cable TV giants), with which they already have a relationship for reselling cellular service.
The article makes a few mistakes. While it notes that Clearwire currently uses a WiMax-like technology, the company’s path is for actual WiMax in 2008. That should have been noted, as it’s key in terms of integration between Sprint and Clearwire. Second, the chart showing a comparison of options between WiMax and 3G services has several problems. First, the bandwidth comparison doesn’t note that it’s downstream speeds only. Second, 3G networks using EVDO Rev. A, which is now extensively but not completely deployed by Verizon and Sprint, can reach 850 Kbps as a routine speed with peaks over 2 Mbps. The WiMax speed is noted as an absolute. Third, comparing 3G to DSL and WiMax to cable is absurd. DSL is routinely available at rates from 1.5 Mbps to 6 Mbps. Cable is typically only available at high starting points, but pricing is often in parity with similar DSL offerings.
Om Malik points out at GigaOm that the Sprint/Nextel merger may be the hidden cause of these plans, as the integration between the two firms has proven problematic. Nextel, however, had a large spectrum portfolio, and it was clear that was one of Sprint’s big motivations.
Posted by Glennf at June 14, 2007 11:12 AM