Sprint Facing WiMax Delays?
Sprint Corp. (NYSE: S) has set an aggressive target for its first WiMax network -- promising a wide-scale rollout of the wireless broadband technology in the U.S. in 2008. It's a target that may be too ambitious, according to analysts and vendors, with a new report predicting that the schedule will slip by a year or two.
Financial analysts at Dresdner Kleinwort have issued a research note suggesting that the WiMax deployment is "almost certain" to run into "cost overruns" and "delays." The Reston, Va.-based operator's CEO, Gary Forsee, hinted on his company's recent earnings call that Sprint may look for additional investors beyond Intel Corp. (Nasdaq: INTC), Motorola Inc. (NYSE: MOT), Nokia Corp. (NYSE: NOK), and Samsung Corp. (See Sprint: Profits Up, Subs Stall.) "We believe the whole project will be marred by severe delays, quality deficiencies and functional slippages," says the analyst firm. "Mass market rollout seems more likely by 2009-10."
Unstrung heard similar talk from vendors at the recent 3GSM show in Barcelona. One source was skeptical that the product would be ready in time for planned rollouts.
Sprint said recently that it was satisfied with the progress so far on the network. The company reiterated its position to Unstrung on Monday evening.
"We are on track with our program and technology evaluations for where we want/need to be at this stage of the network development," said a spokesman for Sprint in an email. "We will have soft launches in two major markets by year-end, with commercial launch during 2008 to a targeted 100 million pops."
"The earnings call did nothing more than reiterate messages made to the marketplace during CES in January and press announcements, and excitement over the prospects. You may have noticed a refinement of our 4G capital expenditure in 2007 to $800 million, down from one billion estimated last August as a result of vendor contract finalization."
It has always been clear, however, that it could be tricky to hit the mobile WiMax milestone using Sprint's preferred technology. The operator wants to use the very latest in mobile broadband known as "Wave 2" WiMax, which mandates chipsets that use "beamforming" and multi-antenna arrays to increase the data transfer rates and capacity offered over the network.
Startup Beceem Communications Inc. , which claims to be the first to deliver a Wave 2 mobile chipset, says it should allow customers to deliver devices based on the silicon in the second half of 2007.
WiMAX Forum certification of initial Wave 2 base station and device interoperability is slated to start in the second quarter of 2007. These forum test schedules have also been known to slip before. (See WiMax Waits on Testing.)
Meanwhile, most base station vendors are working on Wave 1-compliant base stations that they say will be upgradeable to Wave 2 capabilities. In January, Navini Networks Inc. claimed to be first to demonstrate Wave 2 infrastructure in San Jose, Calif. this January. (See Navini Joins WiMax PlugFest.)
Even if the testing remains on track this doesn't leave much time to deploy and test Sprint's initial WiMax sites in Baltimore, Washington, D.C, and Chicago. These are due to be switched on by the end of 2007 with wider commercial services to follow. (See Motorola's WiMax Wait.) — Dan Jones, Site Editor, Unstrung