- Related Stories
-
Sprint to use WiMax for 4G wireless network
August 8, 2006 - Related Blogs
-
Sprint Nextel CEO forced out
October 8, 2007 -
Sprint's CEO could get the boot
October 4, 2007
But such a move, while no doubt cutting costs, could condemn the struggling company to also-ran status.
After months of declining subscriber numbers, Sprint Nextel announced Monday that CEO Gary Forsee had stepped down as chairman and chief executive officer. Forsee's departure had been a long time coming, as investors, upset over the company's poor performance, had been pressuring the company's board of directors to make a change at the top.
Among investors' biggest concerns is Sprint's plan to build a next-generation wireless network using a technology called WiMax. The company has committed itself to spending $5 billion in the next three years to build the network, with about $2 billion of that money earmarked to be spent in the next year to get WiMax coverage to about 100 million people by the end of 2008.
Wall Street analysts and investors say Sprint's WiMax dreams are an unnecessary and dangerous diversion for the company, which is still struggling two years after the $36 billion Nextel merger to realize any of the cost savings that had been promised when the merger was announced.
"They should stop the WiMax rollout immediately," said Patrick Comack, an equities analyst with Zachary Research. "They need to get back to the basics and learn how to run a wireless company. This means focusing more on the present rather than the future."
But without an ambitious plan for the future, Sprint's long-term prospects look even more bleak. The reason is simple. Cell phone penetration in the U.S. market is approaching saturation. For Sprint to grow, therefore, it will have to steal customers from competitors.
But Sprint, the third largest operator in the U.S., may face a tough sell trying to entice customers to abandon their existing service for something similar. Unless Sprint wants to launch an all-out price war on its services, the company will need to present new, compelling features that no one else is offering.
"Sprint needs to have something sexy in the marketplace," said Colin Orviss, head of telecommunications strategic consulting for Patni Computer Systems, a global systems integrator. "A new 4G network using WiMax with truly new and differentiated services layered on top would help Sprint stand out from the competition. And that's what is needed to make a service more interesting to customers."
Since Sprint acquired Nextel in 2005, the company's stock has declined roughly 27 percent. And as competitors such as AT&T and Verizon Wireless add revenue and subscribers, Sprint has steadily been losing customers. On Monday, the company said it plans to report that it's lost about 337,000 "post paid" customers in the third quarter of 2007.
Last week, activist investor Ralph Whitworth, who owns about 2 percent of Sprint's outstanding stock, told The Wall Street Journal that he had lost confidence in Forsee and expected the board to take action. Whitworth has been among the loudest critics of Sprint's WiMax strategy.
Sprint's board looks to be heeding this advice with Forsee, one of the fathers of the WiMax strategy. Once a new CEO takes charge, the company's aggressive plans could be tabled indefinitely.
For now, Sprint says it is moving forward with its WiMax plans.
"I can't speculate about what a new CEO will do," said Leigh Horner, spokeswoman for the company. "But for now, we are continuing to build out the WiMax network. We expect a soft launch of the service by the end of this year and a commercial launch in April of next year."
Sprint's plans to build a 4G wireless network took shape about a year ago, only months after the company launched its 3G wireless network based on EV-DO cellular technology. Using a nationwide swath of vacant 2.5GHz spectrum, the company selected WiMax, an IP-based wireless technology, as the basis for the network. Mobile WiMax promises to offer data speeds faster than current 3G wireless networks and over much longer distances than comparably fast Wi-Fi technology, which today is used mostly indoors to provide wireless broadband hot spots.
Technology giants Intel and Motorola jumped onboard as partners. Motorola promised to provide infrastructure equipment and handsets for the network, while Intel promised to seed the market with millions of WiMax-enabled devices.
Sprint said it would spend $5 billion to reach some 185 million people within three years. But many critics have viewed Sprint's decision to use WiMax, which has not been proven as an effective mobile access technology, as risky.
See more CNET content tagged:
Sprint Nextel, investor, equity, CEO, Nextel Communications Inc.
KEEP GOING SPRINT! INVESTORS KNOW NOTHING!
Those who can't make it in business, tell others what they think they should do.
Analysts are given too much credit. Most of them have no industry experience. They get their information from competing company's PR departments.
down the walled gardens. The cellular cartel is reminiscent of the
unlamented pre-Internet era with CompuServe, AOL, and Prodigy.
Just give us the mobile Internet, and don't dictate our handsets or
our applications or in any way impinge our wireless freedoms. This
is the Net, it's not about voice minutes anymore--take your time
capsule back to the 19th Century and allow us to live in the 21st
Century.
It looks like they now got a hold of Sprint, and innovation goes out the door. And that, while Sprint's EV/DO (3G) had the edge over Cingular's EDGE (2.5G) for years. Cingular (now AT&T again) promised a fast network, but didn't deliver, while Sprint had it. Therefore, many businesses selected or switched to Sprint.
AT&T might be catching up, finaly, but that's too little, too late for many that heavily invested in Sprint equipment and plans. Unless, of course, Sprint cannot be innovative (i.e. introduce WiMax / 4G), because of the restrictions the money people, lawyers, analysts, and other half-informed people rule.
Remember the day - if this course sticks, this could be the beginning of the end for a once innovative company. Sad.
but if the way they're handling my phone's bluetooth issues (search for {sprint mogul bluetooth}) is any indication of their customer service levels as a whole, perhaps they do deserve the warnings i heard before singing up with them: "oh i hear sprint sucks" or "yeah, they have poor customer service--just hope you don't have to call them".
my two cents to sprint: work on your customer service, then work on improving your image.
I hear that since then, the technical reception problems have been largely rectified while customer service continues, being simultaneously offshored and/or voicemail-treed.
After going through what we went through, we swore we'd never again use a product with the Sprint label on it, wavering momentarily when the Disney MNVO was launched, but counting ourselves lucky for not giving in, seeing as how even that was cancelled recently.
The author is right, Sprint would have to do something momentously huge to differentiate itself. A faster data network isn't it.
The only thing I can think of is that they should sell themselves to someone else (Google? Time Warner cable?) and let the Sprint name disappear from the landscape, laying off most of the staff at the same time and letting the new company start over, keeping just the technical expertise and capital investments.
(Feel free to poke holes in this suggestion.)
The main thing is to create a competitive stance. Dropping the WiMax and competing on price, would come out of the blue.
The bigger companies would try to hemmorage losses until they could put sprint out of business, and re-raise pricing.
But if sprint really gets its costs model such that it profits at $9.95 a month (as an example) for basic cell phone service...then they wait it out, until AT&T gets tired of losing money, and cedes the low end to sprint.
When I heard that Sprint was pushing WiMax, I said to myself, "hey, maybe I will stay with them after my contract is up." That is, if they can offer a service competitive with my local cable ISP. Perhaps I can bundle and save a few bucks.
Well, looks like that may not happen. This short term thinking will be the death of them. I hope that they do suffer at the hands of a tech company willing to invest in the future.
WiMax may be a bust, so may the next 10 things Sprint tries. But one of them, if they keep trying will be a winner. But if all they do is milk the cow the cows going to get old and dry up. Then not even the investers win.
Sears dropped their catalog biz about the time the Internet was showing it's potential. They dropped it because it wasn't a winning deal for them. Along came Amazon, nothing more than an internet catalog company. Something Sears allready know how to do but...they blew it.
If you think about the data strain that will put on the wireless telco's networks, WiMax has a lot of advantages over the traditional cell phone technology.
I also understand the WiMAX Forum is presently working to release WiMAX for the 700Mhz spectrum which will improve performance (maximizing # of connections too mobile customers and penetration o trees and structures) via higher bandwidth and reach over the limited 2.5Ghz spectrum being used by Sprints WiMAX net. Lower cost per base station to deploy as well.
Very interesting market place we've got here.
Jim
Why? Because sucking hind *** while trying to lure customers away from the "Big Two" is wasted effort and IMHO, more cash depleting and company defeating...in the long run...than the short term WIMAX opportunity.
Sprint has great friends in this venture, some of whom have deep pockets...Intel...Motorola...Google!
No, with or without visionary Forsee at the helm, I say "carry on". WIMAX is awesome and bleeding edge and a no-brainer. The others will be sucking hind *** when it comes and Sprint is just the one to bring it to us. How do I know this? 'Cuz they are doin' it, as we speak. Wall Street...****!
USA is years behind EU and some Asian countries in terms of mobile telecom technology , applications and even customer care. A lot of analysts ignore this fact.
The emerging needs for mobile multimedia will soon outgrow the 3G domain and should enter 4G in no time. Sprint has got no other choice but to stick with WiMAX even after a new CEO steps in, since giving up WIMAX is going to be more catastrophic.
Short term, Sprint will have to downscale its WiMAX launch, but will need to keep it as their flagship technology . Tech-savvy consumers are well aware Sprint will remain a pioneer to implement 4G in US territory, ahead of AT&T and Verizon., which do not feel they have to run to adopt 4G since they’ve got plenty of juice left in the bottle of 3G.
An analyst said the investors haven’t gotten their dues from 3G yet, but some technology is just a kind stopgap stepping stone leading up to the next big wave. It does not follow that every stage of technology breakthroughs should be justifiable by ROI.
Market researchers and financial analysts are not always making the right analyses and reliable long-term projections because they tend to look more into the rearview mirrors and are blind to the future of technology breakthroughs coming around the corner.
Google would add brand cache, cash, and the ability drive and vision to get wimax out. The combo could be deadly.
Google going it alone could fall on their face due to lack of experience and no existing network in this space.
Yes, Google might consider it positively since Nokia has already branched out into a media segment.
thee most creative on the air. Especially the one referred to.
it's gorgeous, hip, and makes you feel like anything is possible.
The music is so beautiful and catchy as well.
Interesting as well is the fact that the AD first mentions,
Space Travel, I.E. Astronaut? and Time travel, (which I definitely
dreamed about.) magic screen NO. but that's the segue, and the
ad does say, MAYBE. so they're asking you to go along with
them, and with an AD that has that much visual and musical
style going for it...I'm willing to listen.
It's not to late to become an explorer!
- The Air Belongs to the People. Not the rich.
- by disco-legend-zeke October 10, 2007 6:22 PM PDT
- Old radio technology necessitated the creation of the FCC and similar authorities to mete out a scarce resource, spectrum.
- Like this Reply to this comment
-
Showing 1 of 2 pages (38 Comments)Modern radios, however, because they can maintain hundreds of simultaneous full bandwidth beams, reuse the same slice of spectrum infinitely.
There is no need to restrict access to this spectrum to a few enteties. Beams of WI-Fi at 5.7, 5.2, 2.4 do not interfere with each other. Beams of data carried on 700 MHz follow the same rules as any other photons.
The telephone switching providers do not need to outbid each other to "own" a slice of it, the role of the FCC would focus on promulgating and enforcing strict part 15 technical standards, just as is now the case with 2.4, etc.
Because every radio in 700 MHz can relay public safety messages, first responders are given a self healing network. Using GPS information for routing simplifies everything. Every handset would simply transmit its location as part of the address.