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Sprint Clearwire JV has broad implications


22/05/2008

WiMAX’s momentum slowed while the world waited for an outcome, but the new deal will give the industry new confidence in the technology

Sprint and Clearwire’s renewed engagement didn’t just boost WiMAX’s profile in the U.S. According to global vendors, it enormously benefited WiMAX worldwide, giving operators who were on the fence about WiMAX the confidence to deploy their networks.

The cloud over Sprint due to its financial troubles led to a similar cloud over WiMAX. As the largest operator adopting the technology, Sprint was viewed as key to building a global WiMAX ecosystem. After an initial spate of WiMAX rollouts around the world, the pace slowed down late last year as Sprint’s future became more certain. But now that Sprint has renewed its planned joint venture with Clearwire, and more importantly secured $3.2 billion in capital to help fund the network, vendors expect WiMAX activity to rebound.

“We had seen a slow down in the market,” said Danny Locklear, director of wireless network product marketing for Nortel. “A lot of that had to with the uncertainty surround Clearwire and Sprint’s plans in the U.S. … There are several players that have spectrum that they could use for WiMAX, but they were waiting to see what the situation was here.”

Specifically, vendors are expecting operators who are already trialing the technology to move forward with commercial rollouts. In addition, mid-sized and large operators who have been watching WiMAX may view the Sprint-Clearwire deal as the necessary outside commitment to the technology for them to seriously contemplate their own WiMAX plans.

“We had a large number of customers sold on the technology and ready to go, but there was some hesitation,” said Hyam Bolande, director of mobile access solutions marketing for Alcatel Lucent. “The Sprint-Clearwire deal is fairly signal event in the industry. It helped things turn the corner. It gives everyone confidence that we’re moving forward.”

Bolande said that most WiMAX deals out there today are with early movers in the industry—smaller and newer operators willing to take risks on a new technology. Sprint isn’t just large, it’s an established operator. For Sprint to move forward with WiMAX takes away some of the risk of adoption for other operators, Bolande said.

At NXTcomm, WiMAX likely won’t be a key technology focus—the WiMAX World Congress is running concurrently in Amsterdam--but it will most certainly be a hot discussion topic. Sprint CEO Dan Hesse is delivering the keynote on day 2 of the conference, where is he likely to delve into Sprint’s new 4G plans. All of the large WiMAX vendors will also be an attendance though their core focus will likely be on their wireline technologies, rather than WiMAX. While NXTcomm isn’t generally known for wireless, there may be quite a few potential customers for WiMAX at the show.

Sprint has been the exception to rule. Most WiMAX operators globally have been new entrants looking for a technology edge or wireline players in search of last-mile alternatives to augment their networks. Also unlike Sprint and Clearwire, most operators are using WiMAX as a fixed wireless access technology initially with plans to go mobile in the future. The 700 MHz auction delivered new spectrum into the hands of several wireline and competitive operators that could use it for WiMAX—most notably CenturyTel. And there are still multiple players with the same 2.5 GHz spectrum Clearwire and Sprint hold that must deploy networks by 2011, as well as the vast majority of Wireless Communications Service (WCS) license holders that haven’t found a suitable technology for their spectrum.



 

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