Sprint Nextel went into a lot more detail today about its WiMAX network, which it will brand Xohm. The carrier said it will spend about $5 billion building out the network by 2010, expects there will be 50 million devices for it by then, and will generate revenue of $2 billion to $2.5 billion that year.
Gary Forsee, chairman and CEO, emphasized during Sprint's technology summit in Vienna, Va., the carrier sees a new opportunity and business model with WiMAX not only because of the technology but because of the commitments from its business partners.
Barry West, president of Sprint's 4G Mobile Broadband business unit, officially unveiled the name of the network but didn't really explain how the company decided to call it Xohm (pronounced zoam, which rhymes with home). After joking about its derivation, West said it had the "x-factor" and sounds "cool."
Paul Saleh, Sprint's CFO, said the carrier will spend $2.5 billion by the end of 2008 to build out the network, with an additional $2.5 billion spent in the following two years. That represents about $35 to $40 per covered POP (point of presence).
Eighty percent of the $2 billion-to-$2.5 billion in revenue generated in 2010 will come from new sources, Saleh said. In answer to a question, he said WiMAX will impact the carrier's CDMA EV-DO revenues, but Sprint expects its 3G network to continue to grow.
The company reiterated its plans to have a soft launch of WiMAX in Chicago and the Baltimore-Washington, D.C., markets by the end of this year, while the commercial launch in 2008 will reach cities with 70 million people by the end of that year. Its partnership with Clearwire will add another 30 million POPs. It expects to cover 125 million people by the end of 2010.
Initial devices for the network are expected to be PC cards and dongles for laptops, but West says that will quickly change as more devices like cameras, video camcorders and personal media players get the technology.
West said he expects there will be a "flood gate" of consumer electronics devices with embedded WiMAX chips not only from Intel but nearly two-dozen other companies. These devices won't be subsidized by Sprint and will be able to self-activate themselves on the network as long as they have been certified through the WiMAX Forum's process.
Calling WiMAX 4G, the speakers also said Sprint expects to have a 2-year advantage over any other 4G technology. West said Xohm will have the advantage over whatever companies win next year's 700 MHz spectrum auction because it will have much higher capacity, lower interference problems and a broad ecosystem of vendors.
Sprint also announced that it will brand its push-to-talk (PTT) service Nextel Direct Connect across all of its networks. The carrier said it will have new devices and capabilities that will make PTT attractive to consumers and families in 2008.