February 09, 2009, 2:32 PM — Todd Rowley helped to conceive Sprint's mobile WiMAX play, to midwife its birth, to name it Xohm, play matchmaker for its marriage with Clearwire, wave goodbye with the launch of the Clear network build out...and he still can't let go.
Rowley now heads up the Sprint 4G/WiMAX business unit, formally announced last December. The mission: offer "next generation" 4G services -- multi-megabit wireless data services over WiMAX. It will do that by acting as a mobile virtual network operator, with a wholesaler deal to resell those services on the still-emerging WiMAX network being built by Clearwire.
The Clearwire venture lit up its first WiMAX city just last month: Portland, Ore. Service plans range from $20 to $60 per month.
The emphasis on "4G" rather than WiMAX is a subtle but telling change. It suggests to customers that these services are just like the better, faster, more advanced 3G cellular services increasingly being adopted, but even better, faster and more advanced. Last fall, what was then Sprint's Xohm unit launched mobile WiMAX service in Baltimore, with impressive multi-megabit speeds.
Rowley keeps in touch via a Sprint 3G Palm Centro smartphone. He keeps sane by golfing and boating, when he can take time from watching and coaching his three sports-minded kids.
Sprint made endless headlines with its decision to build a nationwide WiMAX network. Now it's not building it. What gives?
When Sprint made its initial WiMAX decision in 2006, we evaluated all the various technologies...and made the business decision to proceed with WiMAX. We felt LTE [Long Term Evolution, the evolution of GSM cellular technology to support multi-megabit broadband] and other options would lag behind this by a couple of years.
We [subsequently] made a decision that we were not in a position to fund a nationwide network for $5 billion. We needed to find partners to help us do that. But we still felt it was critical for the company to have this solution.
Hence, last year's creation of the joint venture? [Completed last December, bringing in $3.2 billion in capital for the build-out]
But as part of the deal, what was important to Sprint was to maintain the ability to have access to a 4G product and service. We wanted that in our product portfolio: it's a huge differentiator for us in the marketplace against Verizon, AT&T, T-Mobile and others.
We needed a group to retail the services we could sell over this [new] network. We wanted to do this in a way that would mainstream this effort into our existing organization. The company asked me to lead this group.
How does the 4G group relate to the rest of Sprint?
It's a small team working with the [existing] product and sales organizations for our CDMA and IDEN and wireline services. 4G is [now] another product in their portfolio. I develop the business plans and marketing, and work with other units to execute on those plans.
There were some delays in the WiMAX rollout. And the economic crisis could affect the roll-out and subscriber adoption. Won't that give LTE providers a chance to catch up?
It's unclear what they're timing is and whether they're prepared to aggressively roll out those technologies. It will take them a couple of years to get to where we are today. It could take them even longer.
Why do you think you can sell 4G data services to your existing subscribers?
Initially, we know we can complement our existing products. If you look at our [sale of] 3G data cards today, and in the market in general, that's a significant market and it's continuing to grow significantly. There are about 9 million total 3G card customers today in U.S., growing to 20 to 25 million in the next few years.
Today we [now] offer a dual 3G/4G data card [the U300, by Franklin Wireless. You can access our nationwide 3G network, but when they're in a 4G footprint, you get the turbo-charged speeds [of WiMAX]. It can switch between them based on coverage.
The 4G capacity gives home users a chance to cut the [broadband] cord. And with the speeds that 4G gives you, we think it's very attractive to the business market. It will enable a lot of applications that 3G nets might not be able to support today.
How are the Baltimore customers responding?
Remember, we're just a few weeks into the Sprint rollout of our dual-mode card. We've been pleased with the results, and the responses from customers have been outstanding. They really notice those blazing speeds.
This is a data card initially. So we think there's an opportunity for individual subscribers. In the 18-to-35 age groups, there's a definite trend to 'cut the cord' for voice, and our 4G service will give them the opportunity to that for data as well. But it's difficult for a family at this point to cut the cord. We know the performance and capability are there to do that. It's a function of us finding the right messaging and niche and devices to enable them to do that.
Are Baltimore business users buying into 4G?
The largest percentage of our base over the first few weeks is definitely coming from the business market. The idea is high-performance broadband capability on the go. They have definitely been the early adopters.
My sense is that what we've been seeing is that high users of 3G data cards are upgrading to this premium [4G] service, and finding it a much better service for them. It's a mix of road warriors and field support teams.
Sprint has been working with vendors to seed markets with WiMAX client gear What's ahead?
We'll be adding standalone 4G cards and modems, and a dual-mode [mobile] phone running on 3G and 4G. We'll have services truly optimized for 4G. Look for us to have a series of other devices and services launched over the next 12 months, adding to our 3G/4G base, both for our existing customers and to attract new customers.
So far, Sprint hasn't said much about VoIP over 4G. What's happening?
We think the broadband service enables a VoIP-type application. We have not announced we are providing any specific VoIP service at this time. We're continuing to investigate this and it's in our capability to add this.
But will you? It would seem like a major shift for a cellular carrier.
If you look at what we've been doing, we're very well positioned on IP services. Our MPLS network and services has been a big wireline investment. Our ISM platform positions us well for IP and VoIP services. And our wholesale unit is one of the largest providers of back-office VoIP services and platforms.
We don't have any inhibitions of offering VoIP service over our 4G network. It's [a question of] what will it look like, will it be fixed or mobile, what do you need in place to get there and so on.
Sprint has struggled with customer losses, and there's been a drumbeat of bad reviews for customer satisfaction. Will all this be a problem for your 4G business?
We think as a company we've taken significant actions to improve overall service. And we believe it's been recognized. Our [customer] care has been recognized, and we're getting awards [for it]. Our 3G networks are continuing to get performance network awards. [In its coast-to-coast 3G test last December, Gizmodo.com rated Sprint's 3G download performance on average better than AT&T and Verizon, though AT&T was the upload leader].
4G gives us another opportunity to reinforce the momentum we're starting to see. It will give us the chance to capture that 4G data leadership 'flag.' No other carrier is positioned for this.