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Sprint Nextel Preps Wireless BB

Light Reading
LR Mobile News Analysis
Light Reading
8/5/2005
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Sprint Corp. (NYSE: FON) and Nextel Communications Inc. (Nasdaq: NXTL) are gearing up to provide wireless broadband services in the 2.5GHz spectrum band to at least 30 million Americans in the next six years -- a move that will be music to the ears of the industry’s network equipment vendors.

The declaration was made this week as both companies were given consent by the Federal Communications Commission (FCC) to merge their businesses, creating the nation’s third largest carrier with approximately 45 million subscribers (see FCC OKs Sprint/Nextel Merger and Sprint, Nextel Confirm Merger).

The merged company will have a near-nationwide footprint of lucrative 2.5GHz spectrum (the spectrum formerly known as MMDS), which could support a variety of wireless broadband services.

According to an FCC statement, the combined entity is under obligation to “fulfil its voluntary commitment to meet certain milestones for offering service in 2.5GHz band, unless circumstances beyond its control prevent the merged entity from reaching those milestones.”

Specifically, Sprint Nextel is required to offer services using this spectrum to at least 15 million Americans within four years “of the effective date of the order consenting to the merger” -- and an additional 15 million American subscribers within six years.

“I am very pleased that the companies have committed to specific milestones in the deployment of services in the 2.5GHz band,” noted FCC commissioner Jonathan S. Adelstein in a statement. “I initially had concerns about Sprint Nextel amassing such a wide swath of spectrum in this band without providing any clear plan for deployment. I raised these issues with the companies, and have been encouraged by their response. They met my concerns head on... and, just as important, they put their money where their mouth is by agreeing to be subject to enforcement action in the event Sprint Nextel fails to meet these commitments for reasons of circumstances within the company’s control.

“This truly is a banner commitment for the wireless broadband industry. It is said that a rising tide lifts all boats, and I believe that the Sprint Nextel investment will help all providers in the 2.5 GHz band. This level of effort will benefit all stakeholders in the band, particularly Education Broadband Services licensees and the equipment and vendor communities. The infusion of capital into this market should significantly stimulate product and service offerings that ultimately will benefit both the commercial and educational segments of the 2.5 GHz industry.”

Fellow FCC commissioner Michael J. Copps was equally upbeat. “This is vitally important spectrum that needs to be utilized fully. I hope that these milestones will bring consumers some much needed broadband competition.”

The 30 million subscriber target is the first time both carrier’s have issued specific details of a wireless broadband network in the 2.5GHz band, following previous ramblings (see Nextel Mulls Wireless Broadband).

Neither party is a stranger to emerging broadband wireless technology. To date, Nextel has tested kit from Flarion Technologies and IPWireless Inc., while Sprint has announced plans to test WiMax products from Motorola Inc. (NYSE: MOT). (See Nextel Flashes With Flarion, Nextel Trials IPWireless, and Sprint Picks Moto for WiMax.)

A glut of other broadband wireless vendors will also be hoping to attract the attention of Sprint Nextel, including the likes of Airspan Networks Inc. (Nasdaq: AIRN), Alvarion Ltd. (Nasdaq: ALVR), Navini Networks Inc., NextNet Wireless Inc., and Nortel Networks Ltd. (NYSE/Toronto: NT).

— Justin Springham, Senior Editor, Europe, Unstrung

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