Global Insight Perspective | |
Significance | The latest announcements about Sprint's Xohm project indicate that initial deployments and plans continue to forge ahead and will push new tariff and sales models on the wireless industry. |
Implications | Support from the industry in terms of devices and services appears to continue to be strong. However, a review by Sprint—and analysis of initial market uptake—may delay further deployments. |
Outlook | WiMAX gives around a two-year lead on capabilities of forthcoming wireless technologies such as long-term evolution; delays in national deployment could squander this opportunity. Innovations such as broader open access, new devices, and tariff models can also be largely implemented using existing network infrastructure as an interim measure. |
In a batch of press releases and with participation from Chief Technical Officer Barry West in discussions at the Consumer Electronics Show (CES), Sprint has revealed more details on the forthcoming launch of the WiMAX network and service. Networks are currently operational and undergoing soft launch testing with employees in Chicago (Illinois), Baltimore (Maryland), and Washington D.C. to be launched to consumers in 2008, most likely towards the end of April. The launch will be promoted by advertising agency Soho Square as the agency of record but with support from other WPP-affiliated companies including Ogilvy and Mindshare/GroupM. Reuters notes that further information on future market launches was not available as new CEO Dan Hesse has launched a review of the US$5-billion deployment in light of Sprint's ongoing troubled performance—a situation that the WiMAX launch is hoped to improve by leapfrogging the available technologies, giving a lead of around two years over rivals.
Portal and Service Management
To facilitate the commercial deployment, Sprint has signed up Amdocs as the prime systems integrator to construct and maintain the "mobile portal" that will contain the various service offerings that Sprint intends to deploy under the "Xohm" brand and through other partnerships. Amdocs will also manage ordering, service activation, and provisioning; customer relationship management; self-service systems; and billing. The system is designed to support registration, identity management, and mobile commerce. Sprint is obviously looking to leverage additional revenues through partnerships with product vendors. With the open internet model previously outlined and with improved access devices making use of the wider internet more feasible than most current handheld devices—with limited input and output capabilities—allow, this may prove more difficult to achieve than retaining users within the operator portal on a mobile phone.
Services
Several service partners were also noted, which it can be assumed join previously mentioned service partners such as Google (see United States: 27 July 2007: Google Named as Applications Partner for Sprint WiMAX Network). SwapDrive is set to provide hosted storage services, facilitating online data backup, access, and sharing services. The intention here appears to be to support synchronisation of users' content, allowing access from multiple devices and encouraging multiple device ownership and ease of use.
Support/customer care services have been outsourced to eTelecare Global solutions. McAfee will implement online security for PCs using the network.
Devices
Reuters reports that Sprint intends there to be around 10 devices, including the Nokia internet devices, ready for sale when the WiMAX network is commercially launched. Sprint will only offer desktop modems and laptop cards, with no WiMAX phones initially available, but other devices will be sold through electronics retailers. This will mirror the launch of the Kindle eBook, which is sold by Amazon, and set a new tariff model by bundling network service in the cost of the device and content (see United States: 27 November 2007: Kindle Sets New Model for Data-Connected Devices).
Sprint also noted several companies that are working to embed WiMAX in their devices, noting that "Ultra Mobile PC" vendor OQO intends to embed WiMAX capabilities by the end of 2008. OQO itself has already been demonstrating a device with integrated mobile WiMAX at the Sprint Xohm booth at the CES show and has claimed performance speeds of 2-4 Mbps on the downlink and 1.5 Mbps uplink.
Although not noted by Sprint, the website Techworld reports that Intel has also been showcasing WiMAX-enabled ultra mobile PCs at the CES, using its Menlow chipsets. These include Linux-based "mobile internet devices" from Lenovo and Clarion and a Windows Vista device from Toshiba.
Asustek was also noted as planning a line of WiMAX-embedded devices during 2008 while ZyXel and Sequans are collaborating to produce modems supporting voice and data applications for the launch of the Xohm service.
Reuters reports that Motorola is targeting a launch of a "multimedia wireless device", which will also support voice services by the third or fourth quarter of 2008 while an "un-named Korean company" will launch a WiMAX-enabled gaming device in the first quarter of 2009.
Subsidies and Tariffs
Reuters reports that unlike mobile phone handsets, WiMAX devices will be sold more as consumer electronics and will not be subsidised. Sprint's Barry West notes that a variety of pricing structures will be used including daily, weekly, monthly, annual, and longer contracts for services. Service fees could also be included in the cost of device sales for items such as networked cameras, which has already been trialled with Amazon's Kindle eBook on the existing CDMA network.
Roaming was also briefly discussed, with West noting that global roaming agreements are being forged and that "Roaming will be much more like the Wi-Fi world than it will be in the world of cellular phones", Reuters reports. This would indicate that Sprint is attempting to avoid the prohibitively expensive data roaming charges presently the norm in the mobile phone industry.
Outlook and Implications
Although the deployment appears to have gained a more cautious edge with the review by the incoming CEO Hesse taking place, a national and indeed international network infrastructure will play a large role in determining the success of the project. An agreement such as that with Clearwire—which later collapsed—may be vital to achieving this end (see United States: 12 November 2007: Uncertainty Trails WiMAX as Sprint and Clearwire Terminate Partnership).
The range of initiatives—particularly introducing new models for tariffs and linking service to device sales—is the key innovation and differentiator that Sprint is introducing through this service deployment. As the launch of the Kindle eBook shows, however, these innovatory moves are possible without the deployment of a separate new network from the existing infrastructure.