CHICAGO—The big WiMAX World show is under way in McCormick Place this week, but the big WiMAX news isn’t. The big news, which is referenced in many of the sessions here, is the launch of Sprint’s Xohm network in Baltimore.
Many in the WiMAX industry think Xohm (and the pending combination with Clearwire) is the ultimate test case for the technology in North America, even though WiMAX is being used by a number of smaller operators. I prefer to think of it as the ultimate business case for WiMAX because the technology has been proven, albeit in a limited commercial way. I’ve seen it working in places like Las Vegas and Chicago.
Berge Ayvazian, the chief strategy officer for the Yankee Group, raised several questions about the WiMAX business case during a pre-conference event to WiMAX World. One was the general business case about how an operator like Xohm can be more than a dumb pipe if the operator is offering flat rates and an open device, open network model.
Perhaps even more important, at this point in our nation’s economic meltdown, is how does a carrier launch a nationwide network when the financial markets are picking up their cards and going home? Rolling out a new network requires bundles of cash, cash that often comes via loans from financial institutions.
Does Sprint have the cash to continue its Xohm rollout? I suspect it has already paid for much of the equipment it needs for Baltimore, Washington, D.C., and Chicago, but what about Dallas and beyond? Xohm has announced plans to launch in Boston; Dallas; Fort Worth, Texas; Philadelphia; and Providence, R.I.
Maybe Sprint won’t have to access the financial markets because of its partners. Bright House Networks, Comcast, Google, Intel and Time Warner Cable agreed earlier this year to invest $3.1 billion in the new Clearwire. Those are deep pockets to draw on, but I doubt if it is enough to roll out a nationwide WiMAX network.
For argument’s sake, what happens if the new Clearwire has to slow down its launch plans, assuming the new company is approved by government regulators? The announcement of the new Clearwire said it wanted to have a network covering 120 million to 140 million people by the end of 2010. That’s a pretty aggressive time line and still doesn’t cover half of the U.S. population. What happens if Clearwire doesn’t reach that goal, especially because the traditional cellular operators like AT&T Mobility and Verizon Wireless will be upgrading their mobile broadband capabilities?
Atish Gude, senior vice president of business operations for Xohm, told me he’s not worried about the failing markets. He said Xohm’s partners have assured the WiMAX operator the wherewithal to follow through with its plans. There already are about 600 cell sites ready for a commercial launch in Chicago. And the device ecosystem has been fueled by Intel’s plans to have WiMAX/Wi-Fi chips in laptops and other portable devices.
We’ll see if Gude is right. These are tough times.
Filed Under: Carriers
