With WiMax, Sprint cuts the cord in Baltimore

BALTIMORE--Executives from Sprint Nextel and its ecosystem of partners ceremonially cut the broadband cord here on Wednesday with the launch of the first mobile WiMax network in the U.S.

Executives also showed off several new laptops that will have embedded WiMax chips, and they announced that Sprint will be offering dual-mode 3G/4G products by the end of the year. The introduction of new devices and integration with Sprint's existing cellular network could help lay to rest worries about the company's initial strategy. But it's still very early days for Xohm and for WiMax in general.

Sprint started selling the new wireless broadband service called Xohm here last week. The service--based on WiMax, a standards-based technology that uses the 2.5GHz spectrum band--offers average download speeds between 2 megabits per second and 4 Mbps, a huge improvement over the 400 Kbps to 700 Kbps speeds offered using 3G cellular technology.

Baltimore is the first city to get Xohm, but it's expected to launch soon in more cities, such as Chicago and Philadelphia. Sprint's chief technology officer, Barry West, said that Baltimore was an ideal place to launch the service because it is representative of many cities in the U.S. both in geography and population. Surrounded by water and full of low-rise brick buildings, the environment also was a challenge for radio frequency engineers designing the network.

But building the network is only part of the challenge. Getting devices in the market that can use the WiMax technology is crucial to making Sprint's 4G strategy a success. Sprint currently claims to have at least a two-year head start over its wireless competitors AT&T and Verizon Wireless, which both plan to use a technology called LTE (Long Term Evolution) to build their 4G network. But unless device makers can get products into the market and in the hands of consumers, the head start might not amount to much. Sprint seems to recognize this.

"The news on September 29 was about the network," West said. "Today it's about the devices, and the defining thing is the embedded model. And it means that everything will come with WiMax."

Sprint was joined at the event by its many partners to celebrate the launch and to show off devices that will be able to access the network. Intel announced that it is now shipping its first-ever combined WiMax Wi-Fi module for laptops. Four notebook manufacturers--Acer, Asus, Lenovo, and Toshiba--said Wednesday that they will include the Centrino 2 chips in their notebooks. These new laptop computers are available now via Amazon.com and NewEgg.com. Dell, Panasonic, Samsung, and Sony also plan to support the WiMax/Wi-Fi chips in their new laptops that will hit the market in 2009.

From Wi-Fi to WiMax
Intel executive vice president Sean Maloney said he expects the evolution of WiMax to follow the same pattern as that of Wi-Fi. He said that seven years ago when Intel first started pushing Wi-Fi into the market, many people didn't believe Wi-Fi would ever take off. But today, Wi-Fi has clearly become a huge success, shipping as a standard feature in almost every laptop on the market. It is also finding its way into dual-mode cell phones, like Apple's iPhone and Google's new G1 offered through T-Mobile.

But Maloney pointed out that Wi-Fi has a "frustrating limitation," which is that it doesn't cover a large geographic area. This is where WiMax comes in. He said that WiMax, which can create a hot spot over an entire city rather than a much smaller area like a coffee shop or a home, provides huge amounts of bandwidth over a big enough footprint to finally make Web 2.0 applications accessible to mobile devices.

Watch this: Sprint launches Xohm WiMax

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But Sprint's WiMax network is still small. Right now, the service is only available in a handful of cities. And even in those cities, it's not 100 percent complete. West acknowledged that Sprint and its soon-to-be partner Clearwire have a long way to go in terms of covering the country with WiMax signals. But he said the new Clearwire, which will combine spectrum assets from Sprint and Clearwire, has more than enough spectrum to build a robust 4G wireless network.

"There are holes in our service today," West said "Over time, we will have the same network as everyone else. But you can't do it all at once."

Until Sprint is able to complete its 4G network, the company plans to use its 3G cellular network to augment the service. Sprint CEO Dan Hesse announced at the event here that the company will be offering devices that will be able to automatically switch between the 4G Xohm WiMax network and its EV-DO 3G cellular network. Sprint will be offering the first dual-mode 4G and 3G wireless technology in its laptop air cards by the end of the year. Pricing details for a combined service haven't been released, but Hesse said consumers can expect to pay more for higher speeds and better coverage.

"It will take a while for the new (4G) network to be built ubiquitously," Hesse said. "And we will have new multimode devices that will use 4G where it's available, and when it's not it will downshift to 3G to provide that ubiquitous data coverage."

But the current economic crisis has led many skeptics to question whether Sprint and Clearwire will have enough money to finish building their nationwide network. The companies, which announced their proposed merger in May, expect to get final regulatory approval by the end of the year.

Hesse said the Clearwire will need a total of about $5 billion to complete its network. The company has initial funding of about $3.2 billion, which means it will need to raise another $2 billion to complete the network. He acknowledged that the current economic crisis could make accessing this capital difficult. But he said he is confident that if the company found itself unable to get the necessary funding that it could turn to its partners for the cash.

"Just look at the cash on our partners' balance sheets," he said "We've got Intel, Google, the cable companies, and even our own cash. That is the advantage of having six well-capitalized founders."