Sprint's Ready to XOHM Out

Sprint Nextel Corp. (NYSE: S) says that it now expects to pay $2.5 billion deploying its nationwide Wimax network through 2008, thanks to its recent deal with Clearwire LLC (Nasdaq: CLWR).

The operator says that's a savings of 20 percent on what it initially expected to spend on the deployment.

The $2.5 billion spend now factors in the cost of upgrading backhaul to handle broadband services, which it didn't before. The operator is expecting the WiMax business to be cashflow positive by 2011.

The Reston, Va.-based operator also revealed today that it will brand the WiMax service as "XOHM," which is meant to kind of rhyme with "zone" [ed. note: if you've got a cork lodged in your throat]. Sprint reiterated that it will start up initial WiMax markets at the end of the year, switch on the nationwide network in April, and cover 100 million people by the end of 2008.

Sprint's CTO and 4G chief, Barry West, says the operator is hoping to build up the business quickly by taking a slightly different approach to cellular with its device plans and adopting more of an "open access" approach regarding what devices it allows on the network. "As long as you're WiMax certified, you'll be able to connect to the network," he says.

West says Sprint wanted to get embedded devices onto the market, which is why it sought out partners like Intel Corp. (Nasdaq: INTC), Nokia Corp. (NYSE: NOK), and Motorola Inc. (NYSE: MOT) to kick-start the endeavor. "I know a lot of you think we asked them to put up money for our network," West says. "We didn't. We asked them to put some skin in the game for the embedded model."

To that end, Sprint has commitments from partners to deliver 50 million embedded WiMax devices in the U.S. -- everything from phones and PCs to TVs. "By 2010," says West, "the air cards that we have for WiMax will only be a very small part of our business."

Sprint is predicting that WiMax and other new services will eventually help it to increase revenues. The company forecasts revenues of $2 billion to $2.5 billion in 2010 and $5 billion in 2011.

Not all of that will be WiMax-based. The company says it will launch nationwide push-to-talk (PTT) walkie-talkie service on EV-DO early in 2008. This should help appease and retain some of its high-end Nextel customers and allow the company to wrap more revenue-driving data services around the popular messaging service.

There's no doubting, however, that WiMax was the star of the show today. "In my view, our competitors are in WiMax denial," crows West. "WiMax is the only horse in the race."

He claims that even after the 700 Mhz wireless broadband auctions, which have to be completed by the end of January 2008, Sprint -- with Clearwire -- will still have far more spectrum than its nearest rivals. The pair can field 120 MHz of suitable spectrum between them across the United States.

Even after the auction, no other operator will be able to match that, West says. "To get the same capacity as one of our sites... you'd need to build up to 10 to 15 sites."

— Dan Jones, Site Editor, Unstrung