Sprint’s 4G Plan: WiMax Not Included

by Matt Klassen on October 12, 2011

It was a roller-coaster series of announcements that likely left many Sprint investors reaching for the air sickness bag, as the company updated the progress of its vision for a full 4G network rollout on its licensed spectrum.

America’s third largest wireless company, who notably backed the Clearwire WiMax next generation network as opposed to the popular LTE technology several years ago, assured its wary investors that it is on track towards its intended deployment of its 4G network; going beyond that to say that it will in fact be investing more resources in developing the network in order to quicken the process.

While this optimistic news sent Sprint’s stock price soaring, investors really should have waited for the inevitable ‘but,’ as the company also announced that it is abandoning its next gen WiMax project and needs to raise significant funds to kick start the development of its own LTE 4G network; an expensive proposition that sent the briefly buoyed stock price into a veritable nosedive.

Sprint’s own financial future aside for a moment, being the only major investor in Clearwire WiMax, an ambitious first attempt at developing a next generation 4G network, the news that Sprint is pulling its support of WiMax will likely spell the demise of the entire project, ostensibly turning the WiMax form factor into this generation’s BetaMax, forever doomed to be the unpopular alternative—and perhaps a sign that you should never use the suffix ‘Max’ with burgeoning technologies.  

For many, Sprint’s abandonment of WiMax was simply an inevitability, with it becoming increasingly clear that the network framework simply couldn’t compete with the much more popular LTE option, especially considering the fact that all the major carriers except Sprint had already backed the latter project.

This decision couldn’t have been easy for Sprint executives to make, with the company holding a 54 percent share of Clearwire, but the company attempted to soften the blow that it was abandoning WiMax by accelerating its overall vision for upgrading its network. In fact, clearly looking to distance itself from a has-been technology, Sprint has now set its completion target date two years sooner than originally scheduled, with its national LTE deployment now slated for mid-2012.

While this certainly seems like good news, it comes with a catch…Sprint doesn’t have enough money to make it happen. Lacking the necessary capital to complete the switch and meet its new ambitious target dates, Sprint announced that it will be attempting to raise the necessary funds, news that send the company’s stocks into a downward spiral.

So what does this all mean? First, it certainly spells the end of WiMax, as the next generation network project depended on Sprint for the majority of its support. Second, it spells tumultuous times ahead for Sprint, as the company has more than tripled its capital spending projections for 2012. While Sprint may still be able to recover from this misstep, it won’t be easy…or cheap.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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