Sprint & WiMax

4:40 PM -- It is interesting the WSJ is reporting that Sprint Corp. (NYSE: S) may give CEO Gary Forsee the boot, in part because the operator is spending billions on deploying a new WiMax network in the U.S.

What exactly are Sprint's other options though? The Reston, Va.-based carrier is already the smallest of the big three mobile players in the U.S. after AT&T Inc. (NYSE: T) and Verizon Wireless . The company needs something to help it gain ground on its rivals, something that isn't happening at the moment. So let's review what Sprint could do:

  • Work on better integrating the Sprint CDMA and Nextel iDEN networks. This is already happening to a degree with new push-to-talk features coming to CDMA. Making it happen faster would likely boost customer satisfaction but may not help to add many new customers. Sprint's rivals are also working on similar systems.

  • Sell off its WiMax spectrum. This would definitely give the company a nice short-term cash boost. It is, however, a bit like selling the family jewels. The nationwide 2.5 GHz spectrum footprint that Sprint has is the only thing that gives it a unique advantage over rivals. Selling it off would merely postpone the need to move to fourth-generation networks and destroy Sprint's ability to do anything different from its larger competitors.

  • Drop the WiMax plans and wait for 4G CDMA ultra-mobile broadband. To my mind, this is just as much of a crapshoot as moving to WiMax, as CDMA may have more name recognition, but CDMA-UMB is further away than WiMax, and vendors have less real-world experience with the technology. Waiting merely postpones the build-out costs by a year or two and -- once gain -- loses the one advantage Sprint currently has over its rivals.

So, moving to WiMax is definitely a gamble. What in the business world isn't?

It seems to me, however, that WiMax is the best shot that Sprint has at augmenting its subscriber base over the next five years. I believe the "do nothing" options would likely leave the carrier looking at a continuing slump in its subscriber base over time.

— Dan Jones, Site Editor, Unstrung

IPobserver 12/5/2012 | 3:00:33 PM
re: Sprint & WiMax I see Yankee Group is recommending Sprint spin-off Xohm... mildly ironic considering that, among analyst firms, it's been the prime cheerleader for WiMax.


Sprint is in a use it or lose it situation relative to its 2.5 GHz holding, so that alone means it has to do something. WiMax is the obvious choice, given the timing, service rules on the band, etc.

What would be dumb would be to let that spectrum go at a low price today and then end-up buying it back again later at a higher price when it really needs that capacity.
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