Successful WiMax launch raises hopes of funding for Sprint
Since its launch in Baltimore on September 29th the adaption of the Xohm WiMax service from Sprint Nextel has exceeded all expectations meaning that despite the current economic conditions the Sprint executives have expressed confidence in its ability to fund the rest of its national network.
During a recent event to celebrate the launch of the service, which was also shown on webcast the president of Sprint’s Xohm Business Unit, Barry West said “This is the dawn of 4G.” Despite long delays the completion of a national deployment of a wireless broadband network over the next few years is planned through a joint venture between Sprint and Clearwire. The deployment will consist of a wide-area wireless data technology called WiMax, which will deliver speeds between 2Mbps and 4Mbs downstream and speeds of 1Mbps and 2Mbps upstream according to Sprint.
Dan Hesse, the Sprint CEO, has advised that Sprint is confident that, as forecast, its partnership will be approved by the end of this year. He also expressed confidence that with the help of partners including Intel, Google and Comcast the $3.2 billion required to fully fund the venture will be met despite falling stocks and a very tight credit market. He said “Capital’s a good thing to have these days.”
A full national deployment, Hesse estimated, would probably cost around $5 billion meaning that a further $2 billion would need to be raised by the joint venture in the future. Hesse said that although, by then, Sprint were hoping for a more open credit market further financing would be ensured with the deep pockets of both Sprint and its partner companies.
The loss of subscriptions in Sprints existing cellular business has been one of the results of the current economic situation but Hesse said he didn’t consider this as being “dramatic”. He went on to say that as consumer opt for cheaper service plans and phones it expects more losses but the willingness of customer to reduce spending on wired internet and TV has been shown in recent surveys. He advised “We believe we are more insulated.”
Sprint confirmed that the response from consumers to the Baltimore WiMax deployment has far exceeded its expectations. Out of the 300 WiMax base stations it had intended to deploy Sprint has fitted 180 around the city. The coverage of WiMax in the Baltimore is shown on Maps on the Xohm website and Sprint confirmed this will continue to grow throughout next year. Also by the end of the year Sprint confirmed they are looking to launch Xohm commercially in Chicago and the nearby Washington D.C.
