Update: Sprint picks WiMax for 4G mobile network

Sprint Nextel, not satisfied with just 3G (third-generation) mobile data, will roll out a faster 4G network using WiMax later this year.

The network, which will start to be rolled out by the fourth quarter and reach as many as 100 million people around the U.S. by the end of next year, will offer downstream speeds of 2Mbps to 4Mbps, Sprint said Tuesday. Combined with fast uplinks, WiMax will offer enough bandwidth for mobile videoconferencing, transfers of large enterprise files and other applications, executives said.

Partners Intel, Motorola, and Samsung Electronics plan to help by equipping notebook PCs and a variety of mobile devices to use the 4G network.

Sprint Nextel is the third-largest U.S. mobile operator. Its choice of WiMax is the first endorsement of the metropolitan-area wireless data system by a major U.S. carrier. Sprint holds licenses around the country for radio spectrum in the 2.5GHz band and had considered other 4G technologies. The carrier said it chose WiMax because it believes it could build an ecosystem of equipment makers around the technology, which is based on the IEEE 802.16e standard.

The 4G service will complement Sprint Nextel's 3G EV-DO (Evolution-Data Optimized) services, executives said at a New York press conference, monitored via webcast. The carrier is already offering video, music and other multimedia services on 3G, but that technology doesn't deliver the economics Sprint needs, said Barry West, Sprint chief technology officer and president of Sprint's newly formed 4G business unit. The WiMax network can deliver four times the throughput at one-tenth the cost of 3G, he said.

Pricing of 4G services will easily meet Sprint Nextel's frequently stated goal of offering customers 1GB of data per month for less than US$20, West said. "We are significantly south of that," he said.

Sprint's embrace of WiMax along with its powerful hardware partners will have an impact far beyond U.S. shores, according to IDC analyst Shiv Bakhshi.

"That will create an ecosystem, trust me," Bakhshi said. Motorola and Samsung's position in the mobile device market, along with Intel's marketing power, will help make this a turning point for WiMax, he said.

"WiMax was in need of a major player signing on to it," he said, adding that Sprint's deployment will become a showcase to the rest of the world.

Sprint considered several other technologies, including the Flash-OFDM (fast low-latency access with seamless hand-off orthogonal frequency-division multiplexing) system that was pioneered by Flarion (now owned by Qualcomm) and extensively tested by Nextel.

The Samsung connection was probably a key factor in Sprint's choice of WiMax, according to Tad Neeley, an analyst at Gemini Partners. The Seoul-based company, which has long provided handsets to Sprint, already has dual-mode WiMax and cellular phones in production in South Korea, he said.

Backers of WiMax, especially Intel, have pushed it as a standards-based technology that will get less expensive as manufacturing volumes grow. Financial commitments by Sprint's hardware partners weren't detailed Tuesday, but Sprint said it plans to spend $1 billion this year and $1.5 billion to $2 billion next year on 4G.

"This is a big step toward driving down that cost curve," Neeley said.