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Sprint Plots WiMax Shutdown, Backhaul Upgrade

Dan Jones
4/8/2014
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Sprint is planning to shut down its WiMax network by the end of 2015 as it upgrades its backhaul to support its 3G upgrades and 4G rollout.

Sprint Corp. (NYSE: S) revealed the plans in a filing with the Securities and Exchange Commission (SEC) on Tuesday. It is reusing the 2.5GHz spectrum from the WiMax service for its new "Spark" LTE upgrade. (See Stephen Bye: Sprint's Network Visionary.)

It writes in the filing:

    As of the date of the Clearwire Acquisition, Clearwire had deployed WiMAX technology on approximately 17,000 cell towers and was in the process of deploying 4G LTE technology using the 2.5GHz spectrum on approximately 5,000 of these sites, which has now been completed. We plan to expand the 2.5 GHz 4G LTE deployment to approximately 5,000 more legacy Clearwire sites. In addition, we plan to cease using WiMAX technology by the end of 2015. We have also evaluated our consolidated cell tower portfolio, including the 17,000 cell towers obtained in the Clearwire Acquisition, and identified approximately 6,000 redundant sites that we expect to decommission and terminate the underlying leases.

As it moves to faster 4G LTE, the operator is also modifying its backhaul architecture, upgrading its time division multiplexing (TDM) backhaul technology with Ethernet. "We expect to incur termination costs associated with our TDM contractual commitments with third-party vendors ranging between approximately $175 million to $225 million, the majority of which we expect to record through the first quarter of 2016," Sprint says in the filing. (See Sprint to Place Big Backhaul Bet.)

— Dan Jones, Mobile Editor, Light Reading

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Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
4/10/2014 | 4:32:55 PM
Re: Backhaul?
Sounds like Blu-Ray vs. HD-DVD, or VHS vs. Beta: Two competing, similar, incompatible stanards, one not inherently superior to the other, but eventually one killed the other due to market forces. 
Pete_S4
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Pete_S4,
User Rank: Light Beer
4/9/2014 | 9:40:17 PM
Re: Backhaul?
I was involved in the Clearwire WiMax roll out in 2007 and CDMA for the last 16 years.  Technologically WiMax and TD-LTE are not that far off each other.  One difference is that WiMax is an IEEE standard like Ethernet and WiFi where as LTE, coming for the telco world, is an ITU standard and the official 4G mobile standard.  WiMax was initially conceived for fixed wireless broadband networks.

You have to go back to 2006 to really understand what was going on.  CDMA operators like Sprint and Verizon were determining what their 4G future would be and they weren't that interested in Qualcomm's proposals.  Sprint in conjunction with Clearwire threw a Hail Mary to get to market first with WiMax, which was commercially available before LTE.  Besides Sprint/Clearwire WiMax only saw wide deployment in countries like China and Korea (incidentally counties with large CDMA networks).  GSM/UMTS operators like AT&T and T-Mobile were always likely to go with LTE due to its tight integration with GSM/UMTS especially in the packet core.  This integration is an after thought when it comes to CDMA based 3G. 

In my opinion what really killed WiMax in the US is Verizon going with LTE early and hard. Verizon is one of the largest CDMA operators in the world and the US is one of the most profitable markets for equipment manufactures.  Verizon was a real market marker and helped work out what integration issues there were running a CDMA 3G network with a LTE 4G overlay.  Keep in mind that Verizon had the largest LTE network in the world for the first few years of deployment and if it's not the largest today, it is still right up there.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
4/9/2014 | 7:13:59 PM
Re: Backhaul?
Did LTE have more range, more power, less expense, some combination of the above?
DanJones
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DanJones,
User Rank: Blogger
4/9/2014 | 1:16:15 PM
Re: Backhaul?
They haven't supported WiMax devices for a while. Probably a case of getting the legacy CLWR users onto LTE.

Yeah they don't have a choice but to get the LTE up on 2.5GHz. Its a big part of their "Spark" plan.
kq4ym
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kq4ym,
User Rank: Light Sabre
4/9/2014 | 12:37:48 PM
Re: Backhaul?
Even with $200 million in "termination costs" it appears Sprint is well prepared to make the switch, moving on to presumably better profits and opportinites after the WiMax turnoff. I would guess it's a good move for the company or at least a pretty well educated decision on their part.
DanJones
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DanJones,
User Rank: Blogger
4/8/2014 | 7:30:44 PM
Re: Backhaul?
Time moved on, lack of broad support, the old story...
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
4/8/2014 | 7:16:33 PM
Re: Backhaul?
What happened to WiMax? I remember when it was The New Hotness.
DanJones
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DanJones,
User Rank: Blogger
4/8/2014 | 3:35:38 PM
Backhaul?
I wonder how much TDM backhaul they still have installed? They were signing fiber backhaul contracts in 2011.
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