In an effort to get back into real competition with Verizon Wireless and AT&T (NYSE: T), Sprint (NYSE: S) says it will up its investment in WiMax technology to $5 billion between now and 2010. The company believes that the new 4G technology can bring it as much as $2.5 billion in revenue by the end of the decade, according to (subscription required) The Wall Street Journal.
The wireless company thinks it can pick up new customers because, unlike the 3G tech used by rivals, WiMax can be used for handset and PCs. The technology has major support from Intel (NASDAQ: INTC) and Motorola (NYSE: MOT) both of which have put hundreds of millions of dollars into recent WiMax IPO Clearwire (NASDAQ: CLWR). Sprint is working with Intel on PCs with WiMax built in.
Sprint also sees WiMax as a way to compete with the fiber-to-the-home products that its rivals are marketing. Its broadband speeds are not as fast, but it does not require home-by-home distribution.
Sprints fortunes have fallen because of integration problems with its NexTel merger. The company has not been able to add new wireless subscribers at the same rate as its major competition, which has damaged its reputation with investors.
Sprint is betting the farm that WiMax will change that.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
8-25-2007 @ 5:29PM
Gumby said...
Anything wireless will win in the end. Cell phones already whupped landline phones. Satellite will whup cable and telcos (dsl) and maybe fiber optics except in the backbones. Wimax will whup Wifi and iPhones... Wimax and satellite will merge operations and trump the world!! Wireless is most advanced you can get... We already have wireless routers. So take the hint!!