Sprint Nextel described plans during the Sprint Ahead
Technology Summit regarding its WiMAX services. Rather than simply calling it
WiMAX, Sprint will market the technology as “XOHM” – pronounced like ZOAM.
A soft launch of the WiMAX network is expected by the end of
2007 in the Chicago and Baltimore/Washington markets. XOHM commercial services
are expected to be available beginning in the first half of 2008. The company
expects to begin offering 4G mobile broadband services up to two years ahead of
other national wireless carriers.
Barry West, president of 4G Mobile Broadband and Sprint’s CTO,
noted that XOHM is “expected to mobilize the Internet by driving the
convergence of telecommunications, consumer electronics and the computer
industries. WiMAX service is being designed to create synergies among disparate
industries through an ecosystem of chipsets, devices, networks,
services/content and distribution to deliver broadband with speeds up to five
times faster than current third-generation wireless devices.” West added that
ecosystem partners, including Google, have committed to embed 50 million WiMAX
chipsets in devices.
Under its planned network sharing agreement with Clearwire,
which was announced last month, Sprint Nextel currently expects the network
buildout to reach 100 million people by the end of 2008 with Sprint providing
coverage to 70 million and Clearwire to 30 million people. Sprint’s coverage is
expected to grow to approximately 125 million people by the end of 2010. At
that level of buildout, the potential market would include an estimated 48
million U.S. households, nearly 5 million small office/home office subscribers,
and more than 130 million consumer electronics devices – according to Sprint’s
Sprint Nextel expects to invest approximately $2.5 billion
in capital for WiMAX through year-end 2008. Beyond 2008, network build is
expected to be increasingly success-based. The company currently expects that
extending its coverage to approximately 125 million people by year-end 2010
would require an additional capital expenditure of approximately $2.5 billion
for a total investment of $5 billion.
The WiMAX initiative is expected to generate positive Free
Cash Flow beginning in 2011 as the annual OIBDA contribution is expected to
exceed capital expenditures, working capital and other cash requirements.