WASHINGTON, October 25 - WiMAX mobile broadband technology will unleash wireless customers and spur the development of new devices and business models which can harness "true broadband" on the go, Sprint-Nextel CEO Dan Hesse said Friday at the National Press Club.
Wireless services will continue to grow in spite of national economic slowdowns as businesses and consumers alike now see wireless as a necessity, said Hesse. More customers are "cutting the cord," he explained, referring to individuals who reject landline telephone completely.
Hesse said that telecom industry revenue from wireless voice outpaced wireline services for the first time last year.
The greatest growth potential remains in the market for data services, Hesse said. Consumers are now spending increasing amounts of time using their phones for web browsing. And businesses take advantage of wireless data services to streamline operations and save money.
Increased efficiency from adoption of wireless technologies could result in $860 billion in savings for customers while allowing the market to grow despite a tough economic climate, Hesse predicted.
WiMax will allow Sprint-Nextel to explore "revolutionary" new business models, Hesse said. The Baltimore market test shows that "WiMAX is real," Hesse said, adding that Sprint plans to expand into new markets in the last quarter of this year, with a full build-out of the network by 2010. Hesse said he hopes that the FCC will approve Sprint's proposed merger with Clearwire "very soon," which will allow for a faster build-out.
Hesse said Sprint chose to use WiMAX over rival LTE (Long Term Evolution) technology because unlike LTE, WiMAX is "available now...and consumers want it now." Sprint was "not waiting" to deliver true mobile broadband while the LTE standard is still being finalized, he said. By launching now, Hesse said Sprint could take advantage of its existing fiber networks for backbone capability to support increased wireless traffic.
Sprint is forming partnerships with other companies to allow all kinds of devices to be sold without service contracts, Hesse said. The WiMAX network will be open to all consumers using a variety of price models, he said. Hesse criticized LTE as suited to the "traditional" business model of the wireless industry. "WiMAX is different," he said.
WiMAX will allow true broadband in rural areas where building fiber networks would be cost-prohibitive, Hesse said. But he predicted some kind of subsidy or public-private partnership will be required so all Americans can afford and receive service.
The next President should take WiMAX seriously as an alternative for universal broadband services, Hesse said. Expanding fiber networks to rural areas is unlikely since incumbent networks don't already have wires in the ground, he said.
Hesse cautioned against a Democratic administration enacting "Orwellian" network neutrality regulations, a possibility he called a "great concern" to the wireless industry. Carriers must sometimes serve the interests of the many at the expense of the few because of limited bandwidth, Hesse said. At its core, the Internet is a collection of private networks that should remain unregulated, he said. "Once it starts, where is it going to end?"
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