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Sprint and Clearwire in JV?
What's the business plan? "In chaos, there is opportunity"
Per a Wall Street Journal article last week,
Sprint Nextel might spin off its WiMAX unit to Clearwire thus exiting its
previously announced plans to offer WiMAX to 100 million Americans by Christmas
2008. As a WiMAX cheerleader, I am sorry to see the largest corporate fan of
WiMAX (Sprint Nextel) throw in the towel so early.
My quick take on this development is that the Wall Streeters want to see an
improved revenue picture for Sprint Nextel (their cellular numbers stink) before
they will commit to making the necessary investment in Sprint Nextel's $3
billion in CAPEX for the WiMAX roll out.
Another possible explanation for Sprint Nextel's hesitancy to execute the WiMAX
plan is that they have yet to firm up a well-targeted business plan. What market
were they going after? Enterprise? Cellular data? Residential? If a mobile WiMAX
base station costs ten times as much as a fixed WiMAX base station and only a
fraction of the subscribers actually require mobile (70 MPH hand offs), why the
commitment to a $3 billion mobile deployment?
A Confucian saw goes "in chaos there is opportunity". I have spoken with more
than one successful WISP who bought into the myth that Sprint Nextel "has all
the 2.5 GHz licensed spectrum in America" and therefore there is no opportunity
for lesser players to invest in WiMAX. Yes, a Clearwire that picked up Sprint
Nextel's 2.5 GHz spectrum would still have a leg up on licensed spectrum play,
assuming that was really necessary vis a vis competitors operating on 3.65 GHz.
Memo to WiMAX entrepreneurs: Sprint Nextel and Clearwire are not as invincible
as some would have you believe. Carpe diem!
Frank Ohrtman
WMX Systems, LLC
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