Other than Intel (which has poured in some of its excess billions), no firm in the world has placed a bigger bet on WiMax than Sprint. The falling (if not failing) wireless carrier is praying that bringing WiMax to market now will allow it to steal market share on its three major US rivals, who are all waiting for the WCDMA-derived LTE.
Today Sprint’s XOHM service (soon to be combined with Clearwire) rolled out its first market in Baltimore. As various analysts have noted, having only a single market limits its value to business travelers until it can build out its national network. Sprint is also waiting for wider availability of WiMax “modems” for laptop and desktop computers.
The pricing models are quoted at $25 for home and $30 for “on the go” service (these are the “temporary” discounts). Not being in Baltimore, I’m not clear what the household price is for multiple devices: we have four computers at home, so can we share one modem between them, as we do with our cable modem and before that with our DSL “modem.”
Beyond the capital for the rollout and the people’s unwillingness to join due to network effects (i.e. limited markets), it seems to me that Sprint faces three big issues:
- Is it fast enough, compared to wireline substitutes. With claimed download speeds of 2-4 Mb/sec, they should be able to beat wireless alternatives until LTE, but their revenue model suggests they also want some of the last mile residential business.
- Will their prices be aggressive enough? Home broadband is a commodity, so people won’t pay a premium for it. They will pay extra for combined mobile/home service, but I suspect the pool of end consumers who want to pay a lot (out of their own pocket) for mobile broadband is pretty small.
- Will their networks have enough capacity? Obviously congestion has been a huge problem for the rollout of new networks since the earliest days (cf. 1984 Los Angeles AMPS rollout), and “all you can eat” wireless plans encourage consumers to use a lot of bandwidth. If they provide poor service they will lose customers, and if they have to build more infrastructure than planned they’ll lose money.