WiMAX Rollout Finally Starts to Happen (Slowly) in the United States

Executives at Sprint Nextel Corp. and Clearwire Corp. announced that their first cooperative WiMAX rollout is set to happen in Baltimore, Maryland. The service will be available in a pay-as-you-go plan, with Intel Corp., Nokia Corp., Samsung Electronics Co., Ltd., ZyXEL Communications Corp., and ZTE Corp. all having devices that will be available for this network either now of before the end of the year.

Focal Points:

• Officials from Sprint said that its WiMAX-based XOHM mobile broadband network was set to deploy for commercial service in Baltimore, MD. Users can look here for a map of the expected coverage areas. Officials said its WiMAX network, based on fourth-generation (4G) technology, is open by design and standards. Some of the ways Sprint plans on differentiating its service include not having long-term commitments, pay-as-you-go plans, allowing WIMAX devices to be purchased freely as other consumer electronic devices, and self-activation of XOHM broadband service.
• Officials said the devices to be used on the Sprint XOHM network will be available via both telephone sales and from Baltimore-based independent retails. Among the items that can be purchased are Samsung Express air cards and ZyXEL modems. Other products, including ZTE USM modems, Intel Centrino 2 WiMAX notebooks and the Nokia Corp. N810 WiMAX edition are all expected to hit the market before the end of the year. Experton Group does not think a broad adoption by end users will occur until Intel-based WiMAX notebooks are readily available, since end users are not going to want the hassle associated with setting up and maintaining WiMAX modems.
• According to Sprint officials various pricing options will be available on the day of launch. Some of the introductory offers include a one day pass for $10, monthly home Internet service for $25, and monthly "on the go" service for $30. There will be special XOHM launch pricing, including a $50 "Pick 2 for Life" monthly service option that will cover two different user WiMAX devices. For Web sites, XOHM subscribers will have free access to MyXOHM. This is a customizable Web site that focuses mainly on local services and entertainment. It will also provide security services, hosted storage, as well as interactive communications. User content will be "pushed" to a customized, location-aware portal.

Experton Group believes end users will appreciate the coverage area that WiMAX makes available. However, it is not likely to be adopted in any broad fashion until a larger national footprint is established. It will take time for users to get used to the fact that WiMAX mobile devices are not subsidized, which will bring some sticker shock to users that have grown accustomed to paying relatively low rates for mobile devices. Given the current economic state, it is likely that rollouts in additional cities are likely to be slower than Sprint has predicted. Sprint is trying to sell its Nextel assets to help free up debt and capital, but no buyers look immediately available. In addition, notebooks with WiMAX chipsets are going to need to be readily available before large scale adoption begins. IT executives should hold off on any commitments to WiMAX until embedded WiMAX devices are available across a broader range of metropolitan areas.