Talk of such such a possibility began last year at the Play conference in Berkeley, CA, but now the timing and legitimacy of such a move appears to be firming up.
This is big news for an industry that is used to closed networks with stringent operating policies. However, just as Verizon pledged to open its network late last year and now with all of the major companies engaged in a price war (our coverage), things are clearly already changing.
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Both Sprint and WiMAX are thought to be in trouble with Sprint quickly falling behind Verizon and AT&T among carriers and WiMAX being called into question when Clearwire ended their partnership with Sprint to develop the technology back in November.
A move to go open could certainly help both. In an interview with us last year, mobile investor Paul Grim, a General Partner at SunBridge Partners, foresaw such as scenario: “Sprint’s only route to glory is a completely open network — through WiMAX”, he told us.
When asked to comment today, Grim saw this latest news as consistent with Sprint chief technology officer Barry West’s vision for an open network for a multitude of devices. He also laid out the two major hurdles Sprint will face: (1) how do they finance the build-out? – and (2) how will they price access?
“Financing the build-out will not happen without some collaboration with Clearwire for network sharing at a minimum, and if they can pull it off, external financing”, Grim said.
As for the second point, Grim noted: “An intelligent pricing structure is what will make WiMax succeed or fail. It should be a combination of cheap fixed-price bundles (at least 50% less than competing offers, probably ad-supported), pay-per-time fees, and a radically reduced fee structure for embedded devices (like the Kindle, PSP/Nintendo DS, Cameras, etc. – any device benefiting from connectivity but not a classic computing device). Adding connectivity to embedded devices has far more revenue potential than even traditional data access – but it has to be incredibly cheap.”
Aside from simply being another open wireless network, Sprint’s WiMAX offers the potential to take things to the next level. Even though land-based broadband in the United States is mostly stuck at single-digit megabit-per-second levels, in places like South Korea, which has a commercial WiMAX network, double-digit megabit-per-second speeds are seen on their mobile devices as Bernard Moon pointed out in an op-ed piece for us last year. Services such as video conferencing and mobile online gaming (as Grim mentions above) could become viable at such speeds.
Google’s upcoming Android platform mixed with this newly opened WiMAX network could also rapidly evolve the mobile landscape. Before the open spectrum bidding began, Google had been rumored to be thinking about purchasing Sprint with such a thought in mind.