Sprint Nextel to form network with WiMax

updated 8:23 a.m. ET Aug. 9, 2006

KANSAS CITY, Mo. - Sprint Nextel Corp., the nation's third-largest cellular provider, said Tuesday it will use an emerging technology called WiMax to build a new high-speed wireless network.

The company said the new network, expected to launch in some markets by late 2007, will provide customers with wireless Internet speeds on par with DSL and cable TV modems and four times faster than speeds available on current wireless networks.

Gary Forsee, Sprint's chief executive, said during a teleconference that Intel Corp. will be supplying equipment to build the network while Motorola Inc. and Samsung Telecommunications America will develop WiMax-compatible phones and mobile devices.

Sprint expects to spend about $1 billion on the initiative in 2007, and between $1.5 billion and $2 billion in 2008.  Forsee didn't specify to what extent the other companies might help offset Sprint's costs, saying those details will come later this year when Sprint provides financial guidance for 2007.

The costly initiative was announced less than a week after the company, formed last summer by the merger of Sprint and Nextel Communications, reported a 38 percent drop in second-quarter profit.

The earnings report, which depicted a company struggling to attract and retain subscribers, sent Sprint Nextel's shares to a 52-week low.  That slide continued Tuesday, with the stock sinking 31 cents a share, or 1.8 percent, to close at a new 52-week low of $16.63 on the New York Stock Exchange.

The WiMax plan also comes as Sprint is still rolling out its third-generation cellular data network, which just last week the company said it planned to upgrade starting at the end of 2006.

The new WiMax network would provide download speeds of between 2 megabits per second and 4 mbps. T hat's in the same range as today's typical broadband offerings over phone and cable wires, but considerably slower than the speeds those providers are starting to offer as they upgrade their networks.

Forsee said he expected WiMax services also would be sold through the company's new partnership with the nation's four largest cable companies, which plan to begin selling Sprint cell service this year.

"They've been very much aware and involved in our 4G plans," he said, using the shorthand for fourth-generation wireless technology.  Other partners may join the venture as well, he said.

WiMax has been touted as a "next big thing" in wireless technology for several years, but actual deployments around the world have mostly been limited to small trials rather than full-blown network launches.  Though derived from the same technology as the popular Wi-Fi standard that provides wireless Internet access in such places as airports and coffee shops, a WiMax signal can blanket a much wider coverage area.

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