Sprint Nextel has said it now expects to spend about USD5 billion building an expanded nationwide 4G wireless broadband network based on the WiMAX technology standard. Around half the investment, some USD2.5 billion, will be made in the period to end-2008, while build out beyond that date will be ‘success-based.’ The company envisages providing coverage to approximately 125 million people by the end of 2010, which would require an additional capital expenditure of USD2.5 billion. The company added that it expects to generate between USD2billion and USD2.5 billion in revenues in fiscal 2010, with more than 80% generated from new lines of business. Sprint expects that its WiMAX initiative will be OIBDA positive in 2010 and will generate positive free cashflow from 2011.
A soft launch of Sprint’s WiMAX network, which will be branded XOHM (pronounced Zoam), is expected to take place by the end of 2007 in the Chicago and Baltimore/Washington areas. Commercial services are expected to become available in the first half of 2008 with Sprint promising that its WiMAX services will deliver speeds up to five times faster than current 3G wireless devices.
Last month, Sprint Nextel announced a network sharing agreement with Clearwire, an existing WiMAX service provider, a move that executives said would accelerate WiMAX deployment and boost the available spectrum for the service in key markets. Under the agreement, Sprint Nextel and Clearwire plan to roll the service out to reach 100 million people by the end of 2008, with Sprint providing coverage to 70 million and Clearwire to 30 million.