Sprint, don't give up on WiMAX, analyst says

If Sprint Nextel decides to appease its restless investors by dumping its WiMAX division, it could be throwing away its best shot at making a comeback, says Phil Solis, principal analyst for mobile broadband at ABI Research.

Noting that Sprint’s scheduled 2008 WiMAX rollout could put it ahead of its competitors in delivering high-speed mobile broadband, Solis says that Sprint’s WiMAX plans are what differentiate the carrier from others. Because 4G technologies such as Long Term Evolution aren’t expected to be deployed widely until 2011, Solis argues that Sprint could get a big head start on the competition if it’s successful in deploying WiMAX over the next year.

What will really make WiMAX a hit for Sprint, Solis says, isn’t only its potential to deliver high-speed broadband to mobile phones and laptops, but also its ability to connect consumer devices, such as digital cameras, portable video game consoles and portable media players. If Sprint can use WiMAX to connect all these devices, it could gain access to new markets that competing carriers won’t have access to for years. “There’s a huge ecosystem in place of companies willing to make products that connect to high-speed mobile broadband,” he says. “What Sprint really plans to do is focus not just on competing for voice services, but in competing in the consumer electronics device market.”

While Solis thinks that spinning off its WiMAX division would be bad news from Sprint’s perspective, he says it could benefit WiMAX as a technology, because a conglomeration of smaller companies could deploy a nationwide WiMAX network successfully without facing the same financial pressures from Wall Street that major carriers such as Sprint deal with on a regular basis. “Spinning off WiMAX could allow other companies to attract fuller investments to deploy the technology, rather than the more conservative, quarter-to-quarter investments that Wall Street favors,” he says.

While Sprint has committed roughly $5 billion to rolling out WiMAX nationally, its commitment to the technology has been questioned in recent months after former CEO Gary Forsee, who was instrumental in the company’s decision to invest in WiMAX, stepped down in October. Sprint’s announcement earlier this month that it had terminated its letter of intent to build out a nationwide WiMAX network with Clearwire Communications only added to speculation that the carrier was planning to spin off its WiMAX division. Publicly, however, the company is maintaining its commitment to WiMAX, and it says it still plans on rolling out WiMAX services in 2008.