We’ve known for years about Sprint’s newly-announced partnership with Google. Today, Google and Sprint Nextel officially announced they were working together on a national WiMAX network.
We will expose all of Sprint’s WiMAX partners, and how the network will be built. Read more to see how deep the rabbit hole goes… and what exactly is going on with WiMAX today.
I’m sure some of you will ask why we’ve only alluded in the past to Sprint and Google partnering on WiMAX. The main reason being, both companies asked us directly to not talk about it. We were made privy to key details about this years ago, when we first broke Sprint’s WiMAX plans. Now that this has been made, we can provide many more details about Sprint’s WiMAX network.
First, what was announced today between Sprint and Google? Not much. The press releases simply make mention of Google’s Apps for use on the network. However, most of the partnership between the two companies runs far deeper.
As we’ve also previously covered, Sprint will require massive amounts of bandwidth to deploy WiMAX, far more than any national wireless network provides today. In order to do this, fiber optics will be used to create a new national backbone for Sprint. This will, in-part be funded by Networx contracts and the federal government. The other portion will be facilitated by Google, which will light up a significant portion of the dark fiber that it owns in the United States. Google is the largest holder of dark fiber in the country today.
The idea is simple, and remains unchanged from when we reported on it early last year. Fiber will link the cities. Towers (just a few) in the city will relay the signal to base stations (what most people think of as the towers themselves). Fixed WiMAX can backhaul data to the fiber network, which becomes Mobile WiMAX from the base station to the handsets/devices.
As we said above, the Networx contracts are key here. While Sprint did not win all of the contracts they were expecting, they did receive enough to move forward with their WiMAX strategy. It is not clear at this time if the iDEN network will be leased to the federal government, as Sprint originally visioned. However, the federal government will have priority-access to Sprint’s national WiMAX network. This will provide the federal government with what they have been pursuing for years; a fail-safe wireless data network system, with multiple fall-backs.
We expect the federal government to opt for deploying some form of CDMA, either UMTS or CDMA2000 in tandem with WiMAX for national communications. Motorola’s Harmony division however continues to make efforts to woo the federal government on mixing iDEN and WiMAX, as they are doing abroad currently.
Sprint’s deal with Clearwire is much more strategic than many expect. At launch, Sprint will have to slowly roll out their mobile WiMAX network, simply because of the much higher bandwidth demands that Sprint has versus Clearwire. Sprint plans to use their WiMAX to serve everything from HDTV to faster-than-DSL internet. Clearwire doesn’t have those constraints currently, their primary market is competing with fixed DSL connections and offering last-mile home/office internet service.
However, Sprint will be able to tout a much, much larger network quickly by claiming Clearwire roaming coverage as their own. One of the great features of 4G technology is its seamless roaming integration, so Sprint will be able to paint a coverage map that includes Clearwire’s coverage initially. Combined with EV-DO as a fallback, Sprint will be able to promote the only national 3G network with 4G metropolitan coverage. And, with Clearwire penetrating into rural areas, Clearwire will profit significantly from roaming users on Sprint.
As an acquisition target, Clearwire is similar to Sprint affiliates. It is not in Sprint’s interest to attempt to acquire Clearwire until their own WiMAX coverage begins to touch up against Clearwire’s coverage geographically.
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Sprint continues to work with SK Telecom despite the company’s attempts to acquire Sprint Nextel. We continue with our analysis that Sprint cannot be acquired by SK Telecom alone, despite reports today that SK Telecom is attempting to do exactly that. We expect that any attempt to acquire Sprint Nextel would be partnering with other companies, and possibly using private equity firms as supporting funding.
From Sprint’s perspective however, SK Telecom’s acquisition would not have significant affects on their strategy. Sprint has consistently pursued a network and device strategy that is similar to SK Telecom’s network. However, Sprint has a much greater task, with over 3,000 miles of land and a network that must be constructed above, and below ground to support it. Essentially, Sprint has crafted a strategy that makes Sprint a strategic buyout target of SK Telecom.
Details as to the existing extent of relations between Sprint and SK Telecom remain unclear. We cannot confirm that the companies are currently partnering on efforts, despite reports from sources that both companies could work together in the future.
Free Wireless for All
Remember when President Bush touted a plan to deliver free broadband internet to everyone in America? No. That’s because the mass media brushed it under the rug; an unpopular president is not supposed to make popular ideas. However, the president is one of a few in the federal government that has assisted Sprint in making this vision a reality.
Sprint and Google have quietly been undertaking an effort to offer free WiMAX for everyone in America. Similar to free Wi-Fi cloud plans, this would be a low-tier internet speed, along the lines of 384k DSL speeds. This is thanks to the large fiber optic backbone that is being built today. This access will be regulated, such that users have a limited range of devices that it can be used with. For example, a citizen would have access to a laptop, but not be able to have multiple devices pulling 384k simultaneously.
Thanks to QoS controls on WiMAX however, sharing bandwidth between multiple devices on an account is possible. This enables someone to pay for faster and faster bandwidth speeds on the WiMAX network, just like DSL and Cable bandwidth tiers today.