Suspense Increases in Sprint's Xohm Gamble
Possible new partners and open APIs balance previous setbacks to WiMAX plan.

Robert Poe on February 26, 2008

Sprint Nextel's mobile WiMAX plan was a bold move from the beginning. The U.S. wireless operator decided to bet $5 billion on a technology none of its competitors planned to use. Last year, the effort ran into troubles that cast doubt on its future; recent developments, however, have once again brightened its outlook. Both the ups and the downs made clear that the plan is a major gamble. Investors might not like that, but it's nothing new for Sprint.

* A Brief History *

Sprint announced the plan in August 2006. It said it would spend up to $3 billion in 2007 and 2008 building enough mobile WiMAX infrastructure to reach 100 million people in the U.S., with more to come later. In April of 2007, it named a number of manufacturers that were building network and end-user equipment. It also announced the creation of an "ecosystem" to coordinate communication among semiconductor and equipment manufacturers.

Things looked even better in July 2007, when Sprint announced a deal to jointly build a nationwide WiMAX network with Clearwire Corp. And in August 2007, the carrier confirmed it would spend $5 billion on WiMAX infrastructure by 2010. That was also when it announced that the name of the service would be Xohm.

The plan promised to bring a potentially disruptive, open-network model to the U.S. wireless market. Xohm wouldn't use subsidized equipment tied to subscriptions, as with existing cellular services. Rather, users would buy WiMAX devices, bring them home, turn them on and only then register for service. Sprint wouldn't know the devices existed until they showed up on its network. It was more like a wifi model than a cellular one. And it had the potential to upend what was then a market controlled tightly by carriers.

The plan soon ran into setbacks. Sprint chairman and CEO Gary Forsee was forced out in August 2007. Some observers speculated that investors were unhappy with his decision to spend so much money on WiMAX. Others, though, claimed the real problem was his earlier decision to acquire Nextel, a deal that didn't deliver the expected synergies. The planned Clearwire partnership fell apart in November 2007, in part because there was no one at Sprint with the authority to nail down the deal. Speculation grew that Sprint didn't have the will to see the ambitious plan through.

Suspense Increases in Sprint's Xohm Gamble - Daily Wireless

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