At 10 Apr 2007 23:09:10 -0500 Scott wrote:

> If they screw
> this one up, they deserve everything coming to them.

Agreed, and I hope they don't. I'd love to see this happen as planned.
Sprint's track record, however, is against them. IMHO, Sprint already
offers the best wireless data option today in terms of coverage, speed
and value, yet their marketing department can't sem to wrestle that
business away from Verizon.

I have every faith in Sprint from a technological standpoint- I just
shudder at the thought of how the rest of the company can screw it up!

> Yep- just like cable broadband five years ago- the priciest option, far
> above DSL and dialup. But it had a differentiator that justified the
> high price- speed. DSL was certainly a viable option for many folks,
> but cable growth exploded, despite the price. With volume came
> competition and now pricing is very reasonable. My cable broadband
> costs me half of what it did five years ago with three times the speed.


True- my point is that your local telco can't match the speed, so they're
probably undercutting cable's price. Here in Denver, Qwest can't match
Comcast's 6-8Mbs speed, so they sell 1.5Mbs for $25- half of Comcast's $50.


Similarly, if Sprint comes out of the gate at $50/month, Verizon or
Cingular can just go to $30. They won't like it any more than Qwest
likes their $25 price point, but the reality of the situation will force
their hand.


> But Sprint has already come out and said that they are not targeting
the
> wired market. In fact, they have announced their true target as small
> and mid-size businesses needing mobility with data. The wired market
> can price itself however it wants and have no effect on mobile data.
> The comparison is the same as trying to compare wireless and wireline
> phones- both have their uses and yet both work independent of each
other
> in the market.


Yes and no- just as many folks have ditched their home phones rather than
pay for both wireless and wireline, some folks will want to ditch wired
broadband to avoid two bills as well, even if the speed isn't as fast as
wired. This might put Sprint in the awkward position of metering/capping
usage, or enforcing a restrictive TOS.

> Another thing to keep in mind are the joint ventures Sprint has signed
> with the big cable companies (Time Warner, Comcast and Cox) where they
> are providing voice capabilities for these companies to bundle with
> their other services. The winning money is on Sprint being able to
> bundle WiMax as well.

It would be a good synergy- the cable cos. could advertise the ability to
"take your broadband with you", while Sprint ensures a significant number
of clients have a wired broadband solution at home totake some strain off
of WiMax.

> > That leaves WiMax to the customers
> > willing to pay a premium for mobiity- essentially the same market that
> > exists today, (except the actual dollar amounts will be lower than
> > today
>
> Not true, because many of the strings attached to wireless data today
> won't be in play. The technology will be embedded in consumer
products,
> no multi-year service agreements will be needed, casual use will be in
> play and the consumer bases their needs on the full range of technology
> available in the market and not just those spoecific to a particular
> provider.

That's a double-edged sword however. Cingular and Verizon could "cut the
strings" attached to traditional wireless data tomorrow if need be to
remain competitive.

And a "no contract/no committment/casual use" model will only be
effective when they're the only (national) game in town. Evenually it'll
be a low-margin dog-eat-dog business just like cellular.

(Quasi-off-topic, but related, I've often wondered why no wireless
carrier has ever offered a pay-per-day cellular data option to go after
the airport/hotel wi-fi hotspot market. With the large number of Treos,
Blackberrys and WinMo phones out there now you could sell a USB cable to
customers to avoid the need for a data card and charge $5/day or whatever
to infrequent travellers and business people who need occasional data but
don't use enough to justify a $70/month plan with two-year committment.)


> In short, the customer buys the toy they want and then
> subscibes to the service (much like an ISP). With Sprint aanouncing
> back in January that a price point of $40-50 was possible, making it
> comparable to unbundled cable broadband.

But pricing it there will encourage it's use as a primary broadband
service for people who are willing to sacrifice higher speeds at home to
cut down on monthly bills. (Two of my relatives use cellular data for
both home and work. They put up with the lower speed cellular data at
home to avoid paying for a second internet provider.) If Sprint has the
bandwidth for that, great, if not, they'd better get started working on
those Terms of Service documents now! ;-)

> WiMax makes much more efficient use of the spectrum in play than any of
> the cellular technologies in play today and will therefore handle much
> more traffic than a conventional cellular network. Another thing to
> keep in mind are all of the Nextel iDen licenses that the company owns.

> If additional spectrum is needed, the inevitable sunsetting of the iDen
> network could free up that frequency band to use.

I thought (but could certainly be mistaken) that Sprint has promised to
keep iDen up for certain large corporate/Govrnment customers.

> All they would have
> to do is provide dual frequency technology to their users, which would
> never know the difference.

I assume you mean giving them CDMA/iDen handsets, not putting iDen
capacity at 1900MHz

> You're still comparing apples to oranges- this is not a voice network.

True, but they share much in common- while data networks don't have to be
as reliable on a second-by-second basis (a "dropped call" is much more of
a problem than a dropped packet or three) people will still want
reliable, ubiquitous service with a high uptime percentage.

> > Seriously, they can "propose" any business model they want- but I'll
> > believe it when I'm holding a Sprint WiMax card in my hand.
>
> The same could be said for the iPhone, true high speed GSM data and a
> myriad of other things that a number of companies are banking on as
> well. What are the effects on Cingular if the iPhone is junk right out
> of the box?


Frankly, minimal. It will have been a costly mistake, but not $10
billion worth! ;-)

Plus the iPhone, for all of it's hype, is not a new technology, nor will
it make or break Cingular. If it tanks, they cut the price to the $300
it should be selling for anyway and sell them out of their lives, and it
ends up on an "Apple's Greatest Mistakes" museum shelf in 100 years next
to Lisa and Newton!

Equally importantly, however, if iPhone is a success, even a RAZR-like one,
the rewards won't be nearly as great as if WiMax is as success. It's
certainly a risk/reward thing.


> > they just aren't talking about the future as much as Sprint is,
> > because right
> > now Sprint desperately needs to talk about the future to take Wall
> > Street's mind off the present.
>
> Then explain why Cingular says it is years away from having anything
> even resembling 4G technology (their words, not mine).

Because, IMHO, they'll look to incremental technologies as stopgaps (some
form of "3.5G") Again, look at the DSL vs. cable example- if they sell
it cheap enough, they can keep 3G as viable then as 1.5Mbs DSL is today.
For example, Alltel still sells 1x today, and T-Mo still sells EDGE.
Current-day 3G certainly puts them at a disadvantage, but it hasn't put
them out of the data game. They compensate by selling it cheap, and/or
focusing on a less-sophisticated lower-requirement market.

> Verizon is
> putting all of its technology apples into mobile mini-TV. Neither
> company has introduced anything of merit in two years, unless you care
> to count the incredible PTT products they both introduced.

:-)


> The reason Sprint is in the condition it is is because of that same
> mentality- they waited for the market to materialize before getting
into
> it (see the Razr as a prime example). Even with no technology changes,
> it will take almost two years of less than stellar financials before
> they recover form these decisions. Cingular took well over a year to
> recover from the merger financially, again with no change in
technology.
> Throw in a major technology change and ask yourself this question- how
> much additional time does that add to the recovery period of any
company
> left in the dust?


Consumers care about the benefits, not the underlying technology. In a
world where it took nearly a decade for the public to learn TiVo was more
than a tapeless VCR, I suspect Cingular and Verizon will still be selling
3G data long after WiMax finally launches.

(Excellent discussion, BTW, thank you for your insights!)