Sprints $5 billion bet on WIMAX

By raheem

In its most recent press release Sprint announced its ambitious bet on WIMAX, promising to spend $2.5 billion by the end of 2008. It will at that time be able to reach 100 million consumers. Between 2008 and 2011, it hopes to spend another $2.5 billion to extend the WIMAX network depending on demand projections. For all that money spent Sprint is  hoping to make $2 to $2.5 billion from the new WIMAX network starting in 2010. Its not a bad return, if the demand pans out.

Sprint is going to be about 2 years ahead of its competitors like AT&T and Verizon in terms of offering a broadband wireless network. And it has formed a significant partnership around the WIMAX technology that includes Samsung, Motorola, Nokia, Intel and Google, ensuring there will be plenty of devices, chips and a powerful search available for the WIMAX ecosystem. Sounds like a pretty safe bet.

So what’s to stop Sprint from becoming the next telecom champion? The answer is Verizon’s FIOS broadband service, which has already been rolled out with tremendous success. Its FIOS broadband offers speeds ranging from 5Mbps – 50 Mbps – which no other provider can match in the US. It has already signed up 1 million customers. In contrast, current WIMAX speeds range between 2 Mbps – 10 Mbps. There is a possibility that by 2008 consumers will be so used to FIOS like speeds that WIMAX may seem like dial up. Such an occurrence is unlikely to take place in the short time frame of 2 years.

But the marketplace is sure to see stiff competition, which is great for us consumers. Where does this leave the other wireless giant, namely AT&T? That will have to wait for another posting.