Sprint CEO says wireless industry resilient to economic downturn

Sprint Nextel CEO Dan Hesse said he expected there to be 140 million potential U.S. WiMAX users by 2010, and said the wireless industry would weather the current economic storm at a luncheon Friday hosted by the National Press Club in Washington, D.C.

After going through a history of the industry and where it is now, Hesse focused much of his remarks on WiMAX and 4G, literally knocking on wood that the Sprint-Clearwire deal to create the new Clearwire company would get regulatory approval and close by the end of the year. The Federal Communications Commission is expected to vote on the deal at its Nov. 4 meeting.

He said Sprint chose WiMAX as a 4G standard because it is "available now and our customers want 4G now."

"4G is here and the speed is real," he said. He also emphasized the way that, as opposed to Long Term Evolution (LTE) adoption proposed by Verizon Wireless and AT&T Mobility, WiMAX would disentangle service from devices and give customers more flexibility. One of the ways in which he said Sprint hoped to minimize the market penetration of LTE was that, simply, they were getting WiMAX out now. The company has deployed WiMAX in Baltimore and plans to deploy it in Chicago, Dallas, Philadelphia and Washington, D.C., pending the close of the deal.

"By 2010, we expect WiMAX service, 4G, to serve approximately 140 million people nationwide," he said.

After another tumultuous week in the financial markets, Hesse also addressed concerns about how the downturn in the economy would affect the wireless industry. He said he was thankful that the industry was so resilient. Had this happened five or 10 years ago, people would have viewed wireless as a luxury that they could get rid of, he said.  He added that the industry will probably see a decrease in enterprise subscribers as businesses lay off workers, but said that Sprint was in a good position because it was "cash-flow positive."

"We have more money coming in than going out," he said. "As long as that's the case, we'll be OK." 

However, Hesse said equipment makers would probably suffer the most as carriers cut back on capital expenditures.

Picking at another bone of contention, Hesse emphasized Sprint's continued support of Nextel and the iDEN network, and said the network is performing at its best levels ever. In addition, the company is rolling out new iDEN devices, such as the BlackBerry Curve 8350i.

Eleven days before the presidential election, Hesse also dabbled in politics slightly, and when asked what he would like to see the next president do to push rural broadband access, he quipped, half-jokingly, "Subsidies for WiMAX deployment."

He said, more seriously, that there will have to be a public-private partnership involving subsidies and incentives.

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