Sprint details WiMAX plans

Sprint Nextel's planned WiMAX service, now dubbed Xohm, will launch in the Chicago and Washington/Baltimore markets by year-end, then reach 100 million users nationwide by the end of 2008, company officials said Thursday.

The secret sauce behind the Xohm (pronounced Zoam) service will be its ability to connect laptops, phones, handhelds and millions of consumer electronic devices wirelessly using standard WiMAX chips from Intel and other manufacturers, said Sprint CTO Barry West during a Web conference for reporters and analysts.

Sprint has commitments from its chip partners to embed 50 million WiMAX chips, with prices of $5 to $15 apiece, into devices within cars as well as cameras, laptops and other equipment over the next three years, West said. Users will click on WiMax access from the device and "come to our network," he said.

The Xohm network will operate as open access, meaning that all WiMAX-certified devices will be able to operate on the network, West added. Devices will not need an additional carrier certification, just the one from the device maker.

Sprint's challenge is that "we have to give [users] attractive services and pricing to get the users to attach to our network," West said. "I am convinced this model can work ... offering the mobile Internet. This is a game-changing business model."

Many ingredients are involved to make Xohm work, including Sprint's partnering with Google for Internet services and with Clearwire to build out a WiMAX network, said Sprint CEO Gary Forsee.

From a financial perspective, Xohm will generate between $2 billion and $2.5 billion in revenues in 2010, but first the company expects to invest $2.5 billion in capital expenses through 2008, and another $2.5 billion by the end of 2010, said Paul Saleh, chief financial officer.

Forsee described Xohm as low-cost wireless service with up to five times the speed of 3G wireless, at rates of 2Mbps to 4Mbps and even up to 10Mbps. Sprint will have WiMAX "before anybody else" with a two-year advantage. "Our competitors are in WiMAX denial," West added.

West and Forsee described two ways Sprint expects to earn revenue from Xohm. One is through monthly subscriptions for wireless cards, which are similar to wireless broadband cards, and the other is through pricing for individual wireless session services, such as a video or a game.

Sprint expects to keep its costs low because it will operate Xohm on 2.5GHz licensed spectrum, which Sprint already controls. That means Sprint's buildout will take far fewer access points than a network built in the 700MHz spectrum that's being sold at auction next year, West said. He estimated it would take 10 to 15 times as many access points for a new provider winning 700MHz spectrum to build out access points than for Sprint to build out Xohm.

Compared to Wi-Fi, Xohm will be over licensed spectrum, avoiding potential interference in Wi-Fi's unlicensed band, West said. He predicted that corporations will be encouraged to build WiMAX hot spots instead of Wi-Fi hot spots "but without all the interference issues."

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