WiMAX

Less than six months after Clearwire, the outspoken proponent of WiMAX, and Sprint Nextel, the number three U.S. wireless provider, announced their deal to create a multi-billion dollar nationwide WiMAX network by the end of 2008, comes news that the deal is over.

Maybe it should not have come as a surprise that Sprint Nextel took an about face on its WiMAX plans. The company is hurting financially and last month ousted its CEO. “Net income fell by 77 percent year-over-year due to the poor performance of the company’s wireless Relevant Products/Services business, which saw a net decline of 60,000 total wireless subscribers during the quarter,” reports CIO Today. With reports like that it is not surprising that some question pouring billions into an unproven technology. eWeek notes this, “Since announcing its ambitious WiMAX plans, investors have questioned Sprint’s commitment to its core wireless business.”

Still, it was a pretty abrupt turn around. Less than two weeks before news that the deal was off hit the streets those high up in the company were still talking it up. InformationWeek reported that according to Ali Tabassi, Sprint Nextel’s vice president of technology development, the “company is continuing its rollout without interruption in spite of the fact that Sprint recently lost its chief executive, who heavily promoted the wide area technology.” CIO Today reported much the same coming from Paul Saleh, recently installed as acting CEO, “WiMAX ‘as a strategy is the future of the business.'”

Saleh now says, “We are operating with a renewed sense of urgency and are committed to taking dramatic actions to fix our business.” And while these dramatic actions include pulling the plug on the Clearwire deal, it does not mean that Sprint is done with WiMAX. It may just be looking for a better deal. According to BusinessWeek, “As the holder of the largest block of unused wireless spectrum in the U.S., Sprint Nextel is entertaining the possibility of teaming with a winner in an auction of wireless airwaves to be held by the government in January, sources say.” And though it may just be buying into the hype, BusinessWeek suggests one possible partner for Sprint is Google, “The Web search leader already has struck a deal with Sprint to offer services on the carrier’s WiMAX network.”

However it works out in the end, Sprint’s reexamination of its WiMAX stance does not signal the end for the technology. There is just too much vested interest to see WiMAX disappear. SmartMoney sums up WiMAX’s viability well, “But reports of WiMax’s demise appear to be greatly exaggerated. There’s a large ecosystem of players committed to the standard; demand for mobile connectivity is on the rise; WiMax has a good two-year head-start on competing standards; and, despite being untested on a major scale, the technology sure looks like a winner.” In fact, Sprint’s actions seem almost an anomaly, other news shows that WiMAX is moving steadily ahead.

On October 19th the United Nations telecommunications agency gave WiMax a vote of approval when it voted to include it as part of the official 3G standard. In its article on the agency’s endorsement, the New York Times reports, “Even before the union’s endorsement, WiMax had been gathering momentum with Intel’s weight behind it. Lenovo, Acer and a few other makers of personal computers recently committed to using Intel’s WiMax chips, which are expected to reach the market in May.” Cisco can now be included among Intel and other supporters: they announced on October 23, they intended to pay $330 million for mobile WiMAX equipment maker Navini Networks.

Ron Resnick, president of WiMax Forum, in Portland, Ore., said in a statement, “WiMax technology currently has the potential to reach 2.7 billion people.” That is a lot of potential users and there is a lot of money invested in reaching them.

More information on this topic can be found on Northern Light’s Wireless Networking Market Intelligence Center and in the following articles.

WiMAX Suffers a Setback
BusinessWeek Online, November 9, 2007

For a time, it looked like there was no stopping WiMAX, a form of wireless broadband that can blanket whole cities for less than rival technologies cost. WiMAX is backed by a who’s who of telecom and consumer electronics firms and carriers around the globe with grand plans to roll it out in the coming months.

Sprint’s Technology Chief: Full Speed ahead for WiMax
InformationWeek, October 31, 2007

In an interview Wednesday at the VON show in Boston, Tabassi said the company is continuing its rollout without interruption in spite of the fact that Sprint recently lost its chief executive, who heavily promoted the wide area technology.

Cisco to Buy Navini for $330M, Signaling Interest in WiMax Tech
San Francisco Chronicle, October 23, 2007

Cisco Systems Inc. is snapping up privately held Navini Networks Inc. for $330 million, extending the networking equipment maker’s acquisition streak and providing the latest validation for the new wireless network technology called WiMax.

U.N. Agency Gives Boost to WiMax
New York Times, October 20, 2007

The United Nations telecommunications agency in Geneva gave the upstart technology called WiMax a vote of approval, providing a sizable victory for Intel and something of a defeat for competing technologies from Qualcomm and Ericsson.

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