Sprint Leads Transformation to 4G Services, Plans WiMAX Handset

How Sprint plans to leverage its involvement in WiMAX and existing 3G services to differentiate from its competition and change the paradigm of how it does business. Interview with Todd Rowley, Vice President & General Manager of Sprint's 4G Business.

Although much of the attention on WiMAX in the US has been aground Clearwire's plan to build a nation-wide network, lesser known is how Sprint plans to leverage its own unique advantages to help drive 4G adoption.  I recently had the opportunity to talk with Todd Rowley who heads up the 4G Business Unit at Sprint.

On of the main arguments against WiMAX in the US has been lack of coverage.  The argument goes like this: While other markets are planed for later this year (Clearwire plans announcements in a few weeks), why would anyone spend money on service or devices with only two markets available - Baltimore and Portland, OR? (Editors note: While Clearwire is the only operator planning a nation-wide network in the US, other regional providers have launched WiMAX networks including Digital Bridge and Towerstream, among others.)

Sprint aims to turn that argument on its head by offering the best of both - the coverage and reliability of its extensive nation-wide 3G service along with the 3-5x performance improvement of WiMAX in those markets where it is available. 

Sprint recently began offering the industry's first dual-mode 3G/WiMAX USB card.  The Sprint branded data card, made by Franklin-Wireless, allows subscribers to access Sprints nation-wide 3G EVDO network and then seamlessly experience WiMAX in those markets as they are rolled-out based on its agreement with Clearwire.

"You get the best of both networks - you get the coverage and speed of the most dependable 3G network and then get turbo-charged when you are in one of the WiMAX markets," says Todd Rowley with Sprint.  "With this device, you get it wrapped up all in one package."

The USB card is offered at $149, which is a premium to current 3G cards that sell for around $49 (although some promotions offer them for free with a data subscription).  The monthly service fee is just $20 more than the current 3G data plans.  People will also have the ability use the dual-mode device with a 3G plan and then upgrade later when they travel to a 4G location.

In order for Sprint to be successful, however, they will need to clearly differentiate the performance advantages of their 4G WiMAX offering relative to the current 3G services of its competitors.  "What we are seeing from Baltimore is that this service is disruptively different than existing 3G services," says Rowley.  "It is delivering 3-5 times the speeds and performance relative to 3G, with 2-4 Mbps and in some case 5-6Mbps performance on the downlink.  That will allow us to differentiate with real-time video and other social media applications."

In fact, two specific aspects of WiMAX may also enable it to differentiate from 3G services: 1) an uplink capability of 1Mbs or greater and, 2) its extremely low latency.  By comparison, most 3G services offer uplink performance in the several hundred Kbps with higher latency which can make video difficult.  The uplink is important as more and more data such as video is streamed from the user back to the tower.  The power of real-time, two-way full motion video on a portable device is a real game changer. 

"Just to put it to some real life examples," says Rowley.  "If you can imaging being at a job site and having some type of technical problem, and then being able in real time show someone back at the home office the problem, and have them walk you through and trouble-shoot .  The examples are endless:  first responders, plumbers, technicians, appraisers for insurance companies, or just being able to stream video from your kids soccer game."

Of course just mention the term MVNO (mobile virtual network operator) and it brings up memories of past business model failures such as Helio, Amp'd and others.  With its 4G WiMAX service, Sprint will essentially be competing in many of the same markets as Clearwire and its other cable partners in the venture.  What will make this one different?

"From our perspective, you have to be really committed to the vision, product and service as well as have a good working relationship with your partner," says Rowley.  "You also have to have a good balance of knowing what market you are targeting and what your cost structure is - and what segments you can be successful with because of that cost structure."

Sprint existing business and a strong customer base and distribution network should help, something missing with other MVNO efforts.  Sprint will also be competing with a new type of service with distinct performance advantages over existing technologies.  "Mobile broadband is a big growth area - in the US there are 9M data cards today and that number should triple over the next few years," says Rowley.  "We believe our leadership in 4G will put us in a unique position."

Sprint also plans to leverage its Clearwire partners Google, Comcast, Time-Warner and others to help spur innovation and drive adoption in a model it refers to as "co-opetition".  "We came at this from the perspective that WiMAX is open and as you embrace WiMAX, you embrace the competitive market places," says Rowley.  "We also knew that we needed strong partners to help drive the adoption of this model."

As for devices, Sprint has recently begun working on a dual mode handset embedded with WiMAX and 3G.  "We have actually kicked off a project that will have a dual-mode, iconic, flag-ship type handset this time next year," says Rowley.  "The device will be 3G for voice and will have 4G to optimize for certain applications.  Special considerations are being given in the design with regards to power consumption and processor to make sure the user as an optimized experience."


 

Monday, February 16, 2009 in Business  | Permalink |  Comments (8)