Sprint sticking with WiMax
Sprint Nextel Corp., the No. 3 U.S. cellphone carrier, reaffirmed its commitment Tuesday to a next-generation system for delivering data that an increasing number of analysts are questioning.
At an industry conference, Sprint Chief Executive Dan Hesse said the Overland Park, Kan.-based company was sticking with a wireless technology known as WiMax. It can send large amounts of information through the air, but it does better in areas with flat terrain.
“WiMax is not ‘slide-ware,’ ” Hesse said, using the tech industry put-down for hyped plans that fail to materialize. “Imagine sending family photos from your digital camera wirelessly, or uploading them wirelessly to a printer, or uploading them to an Internet photo site. With the touch of a button.”
Analysts had been expecting Hesse to use his keynote at the convention of CTIA-The Wireless Assn., a trade group, to announce a multibillion-dollar venture with other companies, including cable firm Comcast Corp. and Internet giant Google Inc., to help pay for the expensive task of blanketing the country with transmission towers and other equipment.
Negotiations instead dragged on past Tuesday’s goal for such a deal, which would ease the financial strain on Sprint, people familiar with the effort said.
“Stay tuned,” Sprint Chief Marketing Officer John Garcia said in an interview.
Sprint has stumbled over its 2005 acquisition of Nextel Communications Inc. and suffered from millions of customer defections. In January, it announced a $30-billion charge for its fourth quarter and predicted a difficult 2008.
Compounding the problem is the embrace of a rival technology by Sprint’s two larger competitors. AT&T; Corp. and Verizon Wireless Corp. are backing another high-volume system called LTE, which might not be deployed until years after WiMax is slated to appear but which has broader industry support.
Sprint hopes to ally with cable companies that want some wireless capability as a bulwark against the biggest telecommunications companies, which are beginning to offer television service.
But the lack of a deal Tuesday encouraged Sprint’s rivals.
“I don’t think we’re going to see WiMax,” Verizon Vice President Thomas Sawanobori said. “The performance of the technologies is similar, but there’s better pricing and a better vendor ecosystem for LTE.”
Analysts echoed the sentiment.
“Two years ago, WiMax went from speculative to optimistic,” said Rajeev Chand of tech investment bank Rutberg & Co. “I think it’s fallen back to speculative.”
Hesse said Sprint would focus its near-term marketing message on the strength of its existing high-speed network. That should be made easier with the June introduction of a new phone by Samsung that he demonstrated.
Inspired by Apple Inc.’s iPhone, the Instinct has an intuitive touch screen that vibrates when its buttons are tapped. Marketing chief Garcia said he would target people who admire the iPhone but get frustrated with the quality of AT&T;’s network. The phones will be priced “under $300” and require a two-year contract with Sprint, executives said.
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