Their first service launch has been delayed, but Sprint Nextel CEO Dan Hesse repeated his vow to blanket the US with a WiMAX network in his talk at CTIA this week.
I sincerely hope he succeeds. We need as many competing data networks as possible, if we're to see any measure of open mobile Internet access. However, I'm worried.
WiMAX has been quite successful in emerging markets, providing fixed wireless Internet access in countries as diverse as Pakistan, Bulgaria, Nigeria, Georgia, Ethiopia and Georgia (the country!).
The US is another story. The only significant US deployment is Clearwire's with roughly 400K subscribers, but on a mostly “pre-WiMax” network. Again, the application is fixed wireless Internet access.
It’s one thing to use fixed WiMAX to provide Internet access in Pakistan. It’s another thing to compete for fixed access in the US. Yes, our telephone & cable duopoly is moving slowly, but they are going after all the more profitable neighborhoods with broadband offerings substantially faster than what fixed WiMAX provides.
What about mobile WiMAX? Mobile WiMAX is in trials today, using technology and providing performance that the 3GSM community will only see 2–3 years from now. Sprint clearly hopes to use WiMAX as a springboard past its competitors and past concerns about its declining user base. Presumably, in the longer term, they hope to converge their dissimilar networks (Sprint EVDO and Nextel iDEN) on mobile WiMAX. But can mobile WiMAX build a large enough market soon enough?
Volume drives down cost and cost advantages win in the end — witness Verizon’s announcement that they are jumping ship on Qualcomm’s CDMA evolution in favor of the 3GSM community’s long term evolution (LTE). Today, GSM networks (GSM/ EDGE/ W-CDMA/ HSPA) have 80% of the world mobile phone market with billions of subscribers and a billion or so handsets manufactured each year. Right now the entire Sprint-Nextel customer base is ~54 million subscribers. Perhaps emerging markets will also adopt mobile WiMAX, thus driving up volumes? Unfortunately emerging markets are even more price sensitive with the high volume application being basic voice telephony plus SMS. GSM is the lowest cost solution by a wide margin.
I hope I'm wrong. I hope mobile WiMAX's performance lead (over LTE) is enough to carry the day. And, in particular, as I’ve written before, I would very much like to see Sprint succeed, with or without Clearwire, because their WiMAX network would represent yet another source of wireless Internet access. With four of more networks capable of mobile broadband Internet access, competitive pressures alone should give us what the FCC is currently ignoring, i.e. mobile data plans that are both open and reasonably priced.