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Sprint Nextel prepares to take on DSL providers

Sprint's announcement with Linksys at CTIA this week sheds light on the carrier's plans for its mobile broadband service.

LAS VEGAS--Sprint Nextel is preparing to take on the big phone companies in the broadband market.

The assault on DSL is coming quietly, but recent announcements and development in Sprint's technology indicate that the company believes it can be the third pipe into the home--a pipe that would challenge the phone companies' DSL service and perhaps would rival even faster-than-DSL cable-modem service.

On Tuesday, Linksys, a division of Cisco Systems, announced the Wireless-G Router for Mobile Broadband (WRT54G3G-NA), which allows Sprint mobile broadband customers to plug their broadband card, used to connect their laptops wirelessly, in to the PC Card slot on the router. The EV-DO mobile broadband connection is then turned into a shared 802.11g Wi-Fi connection. The companies are showing off the new router at the CTIA Wireless 2006 trade show here this week.

Initially, Sprint and Linksys are marketing the product to businesses that require network connections in areas where wired broadband access is not readily accessible, such as construction sites, special events, offsite consulting situations and at events focused on public safety. But Sprint admits the product may appeal to consumers and could be viewed as a harbinger for much larger ambitions, especially as the mobile operator deploys a faster version of its wireless broadband called EV-DO Revision A, which will be available in early 2007.

"We definitely think that EV-DO Revision A makes a compelling case for replacing broadband connections," said Barry Tishgart, director of product marketing for Sprint Nextel. "And beyond that, whatever 4G technology we choose in the future could be something that provides a wireless broadband service that is as good or better than DSL and cable."

Today, average EV-DO speeds are slightly slower than the lowest tiers of DSL broadband service. EV-DO Revision Zero, the current version of technology, provides downloads between 400 kilobits per second and 700kbps with upload speeds of about 50kbps to 70kbps. The new version of the technology, EV-DO Revision A, is likely to offer average speeds between 450kbps to 800kbps for downloads and 70kbps to 144kbps for uploads. These speeds are comparable to Verizon's lowest-speed DSL option, which offers 769kbps downloads and 128kbps uploads.

But EV-DO is only the beginning for Sprint in the mobile broadband arena. The company is looking to its large holding in the 2.5GHz frequency band to provide new 4G wireless services. Sprint is still testing several technologies, but a front-runner in the race is WiMax, which supports peak data download speeds of about 20 megabits per second, with average user data rates between 1mbps and 4mbps. The company will start offering 4G wireless services sometime in 2009, Tishgart said.

But many analysts believe that Sprint will be hard pressed to sell its wireless broadband services as a fixed-line broadband replacement.

"I think wireless broadband as a replacement to regular broadband will only find a niche appeal," said Charles Golvin, an analyst with Forrester Research. "In the long term, I see Sprint partnering with cable operators and others to provide broadband service. I don't see them going after the market entirely on their own."

The biggest issue wireless broadband faces is price. Today, Sprint's EV-DO service costs about $60 per month. Verizon offers its comparable DSL service for $14.95 per month.

Wireless broadband will also be challenged to keep up with developments in fixed-line broadband. Improvements in DSL technology will greatly increase speeds. Verizon is also spending billions of dollars to deploy fiber to homes, which can provide almost limitless amounts of bandwidth.

"The problem is wired broadband will always be cheaper and faster than wireless," said Julie Ask, an analyst with Jupiter Research.