Sprint Nextel Updates on WiMAX and Push-2-Talk Plans

At a conference this morning, the USA based Sprint Nextel detailed the expected capabilities and customer benefits of its planned WiMAX services and also announced its market branding for these services. The company also provided an update on its progress in delivering push-to-talk service on its CDMA network platform, which the company plans to brand as Nextel Direct Connect.

"We've executed the technology plan we laid out when we merged two years ago, and, in doing so, we have advanced our vision of becoming the mobility services leader," said Gary Forsee, Sprint Chairman and CEO. "Our unique set of assets allows consumers to live the mobile lifestyle and businesses to increase productivity by making any place a workplace. Sprint is best positioned in the marketplace to offer these capabilities."

Sprint announced today that its WiMAX service will be marketed under the XOHM brand (pronounced ZOAM). A soft launch of the WiMAX network is expected by the end of 2007 in the Chicago and Baltimore/Washington markets. XOHM commercial services are expected to be available beginning in the first half of 2008. Barry West, President of 4G Mobile Broadband and Sprint's Chief Technology Officer said that partners have committed to embed 50 million WiMAX chipsets in devices.

Under its planned network sharing agreement with Clearwire, which was announced last month, Sprint Nextel currently expects the network buildout to reach 100 million people by the end of 2008 with Sprint providing coverage to 70 million and Clearwire to 30 million people. Sprint's coverage is expected to grow to approximately 125 million people by the end of 2010. At that level of buildout, the potential market would include an estimated 48 million U.S. households, nearly 5 million small office/home office subscribers, and more than 130 million consumer electronics devices.

Sprint Nextel also announced updated financial targets for its WiMAX business, reflecting final execution of the agreement with Clearwire:

• The company expects to generate between $2B and $2.5B in revenues for the fiscal year 2010 with more than 80% generated from new lines of business.
• The company expects that the WiMAX initiative will be positive for Operating Income Before Depreciation and Amortization (OIBDA) in 2010.
• Sprint Nextel expects to invest approximately $2.5 billion in capital for WiMAX through year-end 2008. Beyond 2008, network build is expected to be increasingly success-based. The company currently expects that extending its coverage to approximately 125 million people by year-end 2010 would require an additional capital expenditure of approximately $2.5 billion.
• The WiMAX initiative is expected to generate positive Free Cash Flow beginning in 2011 as the annual OIBDA contribution is expected to exceed capital expenditures, working capital and other cash requirements.

Sprint also announced that the name Nextel Direct Connect will represent Sprint's product portfolio of push-to-talk service and devices, regardless of network platform or device type. Additionally, Sprint plans to expand the Nextel Direct Connect portfolio in early 2008 with new device choices and capabilities. Sprint Nextel demonstrated the use of Nextel Direct Connect on its CDMA network today at the Sprint Ahead Technology Summit, providing push-to-talk service between devices on the CDMA network and between devices on the CDMA and iDEN networks.

Posted to the site on 16th August 2007