You are OK, I am OK !!!!

Was Initially a bit apprehensive about writing an article on WiMAX because of the sheer number of WiMAX experts around me but somehow gathered courage to air my views on it. Few years ago sometime during the dotcom boom, Gartner coined a terminology, "Hype Cycle" to explain the over-enthusiasm and the following disappointment that typically occurs with new technologies. The 5 phases of the Hype Cycle starts with technology breakthrough followed by over inflated expectations of the technology and then a period of disillusionment, where the technology & the user expectations synchronize which lead to further experimentation into the practical applications of the technology and finally the last phase of the hype cycle where the benefits of technology become widely accepted.

If WiMAX, as a technology were to be mapped to the Hype Cycle, my guess is that it would be firmly entrenched in the third phase, the period of disillusionment. It was all good news on WiMAX front, until the poster boys of WiMAX vendors worldwide, Sprint & Clearwire decided to call off their venture due to complexities in the partnership but i believe the problems started after a "WiMAX friendly" sprint CEO quit owing to investor pressures. This was followed by good news on two fronts for WiMAX. First, it being categorised as a 3G technology (Is it actually good news ?? Were'nt they targeting 4G) and the auction of 700 MHz spectrum.

But Sprint's problems continued and they still persist. Last week in its Quarterly results, Sprint reported a loss of over 29Bn dollars and it also revised downward its guidance for next few quarters and asked its investors not to expect any dividends in the foreseeable future. Although this was attributed to goodwill write-off's following Nextel purchase. But i believe, the reasons behind the loss are far more complex. On one side, Sprint is failing to stem the subscriber churn(mostly in the high ARPU postpaid segment), on the other it has already committed huge sums of cash for WiMAX deployment. It is yet to fully start realizing the synergies out of Nextel merger and the competition is one-up over sprint when it comes to understanding the market. Recently, almost all major operators introduced unlimited Voice, text and Data for $99 and this idea as per some industry sources was sprint's brainchild (Sprint was the last among the "big 4" to launch the unlimited "Simply Everything" plan behind AT&T, Verizon & T-Mobile). Last year the vendors committed dual CDMA/WiMAX phones in the market by early 2008 but there is not much news on that front yet. All this apart, WiMAX's main competitor LTE is capturing a lot of news space lately with successes in its latest round of trails. It is continuously adding Service providers across the world in its "backers" list and the fact that it represents a more natural evolution from 3G to 4G is helping its cause multi-fold. Although WiMAX will have the time to market advantage over LTE, delays in certifications by WiMAX forum coupled with network rollout delays will substantially narrow its Window of opportunity.

Although the need of the hour is a clean-up of its core Wireless business, i believe the future success of sprint almost solely rests on its WiMAX investment. What kind of Business risk is the company embracing when all eggs are put in a single basket ?? Clearwire on its part sensed trouble early and moved out of the JV. Clearwire is more a small and niche company and i believe a move out of the JV will actually help Clearwire in terms of financing from the major equipment vendors for WiMAX deployment although there is a talk that it has massively reduced the number of PoP's that originally committed to deploy during the initial phase. The WiMAX vendor trio of Intel, Motorola & Samsung have till date projected a very rosy picture of the technology but problems like high Capex, delays in certifications by the WiMAX forum and lack of interoperability with existing handsets is for everyone to see. What these vendors have to understand is whether real or perceived the future of WiMAX still rests heavily in Sprint's hands . Yes, WiMAX can and will survive without Sprint but at an entirely different level. Sprint was exactly what WiMAX needed when the technology was still in its initial phases back in 2006 and i don't think situation has changed much since then.