Sprint Nextel handed
out its biggest prize assignment to date when it announced on Monday that
Samsung Electronics will be the prime builder and supplier for its New York
WiMAX network.
So far the Korean
vendor has done very well in the northeast United States since it was earlier awarded
the same role in Washington D.C., Philadelphia, Boston, and Providence, Rhode
Island.
Sprint has
earmarked $5 billion for the building of a nationwide wireless broadband network
based on WiMAX, an emerging and untested standard that promises speeds and performance
comparable to wired services such as DSL.
Generally the deployment
of a largely untested network takes some trial and error, and carriers tend to
apportion contracts regionally so that the best performers are given the “plum”
assignments.
And those are
generally in densely populated areas, where the supplier can sell a lot of
network and customer equipment.
Sprint, Nokia, Samsung,
and Motorola market network gear, chipsets, handsets, and other equipment that
support WiMAX. Intel, another Sprint supplier, markets WiMAX chipsets.
“New York is the
ultimate plum because of the growth and demand potential, so obviously Sprint
is happy with Samsung’s performance so far,” said Joe Nordgaard, director of
wireless consulting firm Spectral Advantage.
In January, Sprint
selected Motorola for the building of its WiMAX network in Chicago. In March, Sprint selected
Nokia for its WiMAX network deployment in four Texas cities -- Dallas, Fort
Worth, San Antonio and Austin.
Building a network
based on an emerging standard can be problematic and expensive. There are
issues having to do with device interoperability and aligning both the network
and customer devices with the radio frequency.
Sprint, which
began deployment earlier this year, expects to offer WiMAX services to most of
the major cities in the country by the end of 2008.
Sprint has moved
to reduce the cost of deploying its network nationwide. A month ago Sprint and Clearwire,
said they will combine their efforts and build a single U.S.
nationwide WiMAX network, rather than two.
Until this agreement
was announced both companies had very aggressive plans to commit billions to
competing nationwide networks.
By pooling their
resources the two companies are hedging their bets and limiting their exposure
with a technology that’s not been tried on a national scale anywhere.
Sprint, the much
larger carrier in the deal, will build about 65 percent of the joint network
while Clearwire will be responsible for the other 35 percent.
Sprint will focus on
the larger urban centers while Clearwire will focus more on the “second
cities,” along with suburban and rural areas.
Motorola is
Clearwire’s sole supplier.