Can Sprint keep WiMAX expectations in check?
I have to commend Sprint for its stance on mobile WiMAX. In just one year the company has committed to this new technology, developed a thriving ecosystem of vendors, launched a new service brand (Xohm) and debuted an entirely new business model based upon open access for devices.
But the company also has made a lot of aggressive claims that will likely cause it some big headaches in the year ahead. I hosted a Webinar earlier this week, called "Building a Nationwide WiMAX Network" where my panelists discussed Sprint's venture, its relationship with Clearwire and the growing WiMAX ecosystem.
Current Analysis analyst Peter Jarich talked about how he believes Sprint may have set itself up for trouble because of its "inflated" expectations. Specifically, Jarich thinks it's a mistake for Sprint to talk about WiMAX as a 4G technology (the ITU has not yet defined specifications for 4G) and to fuel consumer perception that there will be all types of embedded devices available that will work on the company's WiMAX network. Jarich says that Sprint can't control the electronics industry, so consumers may be disappointed when they don't find WiMAX-embedded MP3 players or gaming devices available right away. "That may happen but it's difficult when the market hears these claims. They tend to get inflated. I think 2008 will be a tough year," Jarich says.
Plus there are still many questions about this game-changing "open access" vision that Sprint has for its network. I expect the company will be under a lot of scrutiny in the months ahead to see whether it can make good on its promise to allow all types of WiMAX-certified devices on its network without prior approval from Sprint. Barry West, Sprint CTO and president of the company's 4G business, envisions consumers buying WiMAX devices that are branded by different vendors and self-activating them. But he also admits that the back office presents a unique challenge. He says the company is working with Amdocs and IBM to streamline the activation process. I hope it works as seamlessly as he describes it. Activation has been an Achilles heel in the industry for a long time. It took years for billing and OSS companies to enable self-activation of prepaid phones so I'm a bit skeptical about the process.
Sprint faces a lot of scrutiny in the coming year. Not only is the company launching a new wireless technology on a different spectrum band but it is also instigating an entirely new business model for wireless. I hope the company has the backbone to stay true to its vision and work through the glitches. -Sue
P.S. You can access the archive of my "Building a Nationwide WiMAX Webinar" by clicking on this link