By placing a $3 billion bet on mobile WiMAX last week, Sprint Nextel became the first U.S. wireless service provider to tip its hand about how it intends to provide customers with the transmission speeds needed for next-generation applications.
Sprint Nextel in April said it would make its 4G technology decision this summer and start deployment by 2008, but the company had tested multiple next-generation technologies, and it wasn’t clear which would win.
CEO Gary Forsee said last week the technology would have to meet four criteria: It would have to let Sprint Nextel be first to market; provide economical performance; let the carrier create an environment where it has multiple suppliers for its network; and let it develop, offer and support high-speed services. Mobile WiMAX, or 802.16e, met all four.
Sprint Nextel also announced Intel, Motorola and Samsung will supply network and user gear to support the 4G deployment.
Mobile WiMAX is a fairly new standard, and Sprint Nextel is one of the first large carriers to commit to it. The choice could be viewed as a gamble, but one analyst says the move might fuel WiMAX acceptance worldwide.
“That will create an ecosystem,” says Shiv Bakhshi, an analyst with IDC. The position of Motorola and Samsung in the mobile device market, along with Intel’s marketing power, will help make this a turning point for WiMAX, he says. “WiMAX was in need of a major player signing on to it,” he says, adding that Sprint Nextel’s deployment will become a showcase.
The carrier says it will spend $1 billion in 2007 and $1.5 billion to $2 billion in 2008 to build its overlay 4G network, which will run over its existing / network.
The network’s new capabilities will offer downstream speeds of 2M to 4Mbps, which rival landline DSL and cable services.
Forsee says Sprint Nextel’s WiMAX service will be available to 100 million people by 2008.
Before making its decision, the carrier explored many technologies, including Qualcomm’s Flarion Flash- (Orthogonal Frequency Division Multiplexing), but that operates only in the 1.25MHz channel and the majority of Sprint Nextel’s spectrum is in the 2.5GHz band, said CTO Barry West. According to a report from the Telecommunications Industry Association, however, Flash-OFDM is expected to catch on with 13 million subscribers worldwide by 2010, when there will be 7.2 million WiMAX users worldwide.
“We see many of these emerging wireless standards doing well, although by selecting the Intel 802.16e strategy [Sprint Nextel] has made a rather big statement,” says Larry Swasey, senior analyst at consulting firm Visant Strategies. “Many of the other standards that were trialed and not chosen are in commercial deployments elsewhere and still have a large audience of operators, both fixed and mobile, that could utilize [them] for a myriad of purposes and in different frequencies,” he says.
Other competing technologies include -Frequency Division Duplex, IP-Wireless, High-Speed Downlink Packet Access and Time Division Code Division Multiple Access.
Mobile WiMAX is an IEEE specification. There are two technologies supporting WiMAX that may make it more advantageous for some wireless services providers, according to the WiMAX Forum. The first is Orthogonal Frequency Division Multiple Access, a multiplexing technology optimized for wireless transmissions using multiple paths, according to the forum. It’s said to offer higher throughput, capacity and flexibility in managing spectrum resources. The other is Time Division Duplex, which is said to be less complex than the Frequency Division Duplex (FDD) technology used in most 2G and networks, because it uses only a single frequency to transmit data. WiMAX can support FDD, however, which is important for backwards compatibility.
Other carriers such as AT&T and BellSouth have been conducting 802.16, fixed-wireless WiMAX trials. Fixed WiMAX theoretically can support transmission speeds of 2M to 6Mbps to individual users, though many of the trials are supporting lower speeds.
Cingular Wireless, Verizon Wireless and T-Mobile have not made any formal 4G announcements. “No one else is talking about 4G,” says Phil Redman, an analyst at Gartner. “[Sprint Nextel] is making a disruptive move by going with WiMAX at this point, when most other carriers haven’t yet seen a return on 3G investments.”
T-Mobile has upgraded its network with Enhanced Data rates for GSM Evolution technology, which supports about 120K to 130Kbps to users. T-Mobile has expressed interest in HSDP technology, but it needs more spectrum, Redman says.
T-Mobile doesn’t have the extra spectrum needed to support higher-speed 3G services, which is why it’s bidding aggressively in the FCC’s Advanced Wireless Service auction, which started last week, Redman says.
Besides the fact that Sprint Nextel wanted to lead the industry into 4G, Redman also points out that it struck an agreement with the FCC to deploy a nationwide wireless broadband network so that it could retain all of Nextel’s spectrum when the companies merged last year.
IDG News Service reporter Stephen Lawson contributed to this story.
