Sprint sees WiMAX as path back into fixed broadband

Feb 9, 2009 5:50 PM, By Kevin Fitchard

New 4G VP says Sprint’s WiMAX plans go beyond mobility; Clearwire service could be used for residential services such as VoIP and even femtocells

For Sprint, WiMAX represents a lot more than faster mobile data services. Todd Rowley, vice president of 4G for Sprint, said the carrier will use its relationship with Clearwire to get back into the local access business it left behind when it divested Embarq. Not only is the carrier planning to offer broadband access via WiMAX to homes and businesses, it is evaluating voice over IP and exploring using the wireless network as the back channel for femtocells.

“We want to make 4G a major initiative within the company,” Rowley said. “4G gives us the capabilities to actually start offering home services — voice and broadband services. We’ve seen a big trend of people cutting the cord at home. This allows us to make it a little easier.”

Currently Sprint offers only a single mobile device over the WiMAX network, a dual-mode CDMA/WiMAX laptop card made by Franklin Wireless. And that modem is available in just one market, Baltimore, the only network Sprint launched under the Xohm banner before it turned its WiMAX assets over to Clearwire. Due to back-end integration issues, Sprint can’t even offer the new data card over Clearwire’s second commercially launched network in Portland, though Rowley said that issue will be resolved shortly. But Clearwire plans to roll out networks in major markets this year — including Chicago, Atlanta, Las Vegas and Washington, D.C. So Sprint will be able to leverage its mobile virtual network operator (MVNO) agreement with Clearwire more fully, offering new mobile devices as well as residential and small business broadband services, Rowley said.

Sprint has identified four business models for using the WiMAX network, Rowley said:

• An extension of its mobile data service, using 3G/4G data cards, wireless-embedded laptops and eventually dual-mode handsets to offer faster broadband speeds to its growing base of mobile data customers.
• A 4G-only service, where WiMAX devices such as netbooks or laptops would use only the Clearwire service, though it would be marketed and billed under the Sprint name.
• A small-business broadband service, using gateway modems to link to the WiMAX network, which Sprint then could bundle with other business and mobile services.
• A residential broadband service, also using home gateways to bring broadband and other residential services into the home.

The last two business models would essentially give Sprint its first last-mile access since spinning off Embarq in 2006 after its acquisition of Nextel. Though WiMAX can’t deliver the raw capacity of newer fiber access and cable modem technologies, its bandwidth is theoretically on par with copper-based DSL, allowing Sprint to deliver many of the broadband services an incumbent telco could offer over a legacy network. Sprint already has VoIP services under evaluation, which it could use to deliver a home voice solution, Rowley said, but a fixed voice service could be just the beginning.

WiMAX could power femtocells
One of the other possibilities Sprint is exploring is attaching a femtocell to the end of a home WiMAX connection, which could not only amplify WiMAX capacity to 4G devices in the home or business but serve as a backhaul link for 2G and 3G traffic.

Sprint was the first operator to commercially launch femtocells in the U.S., followed by Verizon and AT&T last month. Unlike its competitors, which can sell the broadband connection along with the femtocell, Sprint’s customers have to get their broadband from another provider, a liability in a world in which broadband, voice and wireless are increasingly bundled into a single package. On the other hand, Sprint doesn’t have an established customer base of wireline voice users to cannibalize. If it were to offer a femtocell backhauled to its CDMA core network via WiMAX, Sprint could do away with the notion of the “home phone” entirely, instead selling plans that offer unlimited or highly discounted minutes when used over the femtocell connection. Sprint’s current Samsung-designed Airave solution already sells unlimited domestic voice plans to individuals for $10 a month and families for $20 a month.

“A home femtocell solution is absolutely something we are considering, though we’re really only in the evaluation stages right now,” Rowley said.

Any WiMAX femtocell could be combined with a WiMAX broadband gateway, connecting to either a wireless or wired home network. But it also could be used to backhaul WiMAX traffic. WiMAX devices such as Sprint’s new dual-mode wireless card could use the femtocell almost as a home repeater, boosting the relatively weak signal of the mobile device over the wide-area WiMAX network, resulting in both higher overall capacity and power savings at the device.

As for the devices themselves, Rowley expects a greater variety of WiMAX-embedded computers, handsets and eventually embedded consumer electronics to emerge as Clearwire’s network rolls out. Clearwire has already secured commitments from many of the world’s top PC makers to ship laptops containing Intel’s WiMAX solution. Many of those same PC manufacturers already make 3G laptops with CDMA EV-DO radios. When those manufacturers start combining the two radios in a single device, Sprint will begin carrying them, Rowley said. Beyond laptops, Rowley is counting on the WiMAX ecosystem to embrace the growing netbook market and eventually support the consumer electronics market, which could see WiMAX embedded into everyday gadgets such as portable music players and digital cameras.

Once the market reaches that point, Sprint will have to re-evaluate the basic business model in which it sells wireless service. The 3G/4G data card service it offers today costs $80 a month, about $20 more a month than its 3G mobile broadband service. If Sprint is supporting multiple devices, each consuming variable amounts of data ranging from minute to massive, it cannot charge $80 a month for each connection, Rowley acknowledged. But Sprint can explore alternative models, which could allow customers to buy an all-encompassing data plan or pay incremental monthly fees for each new device they connect.

“What 4G does for us and why we selected WiMAX are the business models,” Rowley said. “We’re able to open up and do new business models we haven’t done in the past. We’re talking about multiple device plans and buckets of bits. That’s a whole new opportunity for us.”

RESOLVING PROBLEMS IN THE BACKEND
Before Sprint can implement any of this, though, it has to solve its backend connection problems with Clearwire. Because Sprint and Clearwire built their initial WiMAX networks independently, they deployed separate authentication authorization accounting (AAA) platforms that did not integrate with one another when the companies merged their WiMAX assets late last year. That means that Clearwire’s Portland network not only can’t communicate with Sprint’s provisioning and billing platforms but also doesn’t recognize Baltimore customers and vice versa. That prevents Clearwire from offering roaming between the two networks and presumably is one of the reasons it has held back launching the already-deployed networks in Chicago and Washington, D.C., both of which are hooked into Sprint’s Bridgewater Systems-built AAA platform.

Rowley said the issue is a relatively minor one that should be resolved by the end of the first quarter or the beginning of the second quarter. But once the issue is resolved, Sprint will be able to offer its branded 4G service not only in Portland but also in any other new Clearwire market, regardless of whether it was initially built under the Sprint or Clearwire banner.

Sprint sees WiMAX as path back into fixed broadband

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