August 8th, 2006
SprintNextel's WiMax challenges aren't all technical. Some are execution-related
Mark me down as interested, but not surprised at the news SprintNextel will use WiMax technology to build out its G4 WiFi Network.
The price tag should be between $1 and $4 billion, experts quoted by The Wall Street Journal attest.
Sounds like a big price tag, but I see a relatively quick return on investment.
Right now I am paying the same SprintNextel $59.99 a month for broadband Internet access via EV-DO.
That’s $720 a year.
Back of the envelope calculations: counting inflation SprintNextel WiMax would need to add or convert about six million new, plus converted legacy WiFi customers a year to cover a $4 billion nut.
If they are looking at a three-year ROI recovery window, that goes down to two million new subs.
On the way to build-out, SprintNextel needs to work collaboratively with chip suppliers and device manufacturers to ensure compatibility.
Then, close to the date, execute, execute, execute. To me, that’s the sticking point. Given the fact that a year after the merger, Sprint and Nextel’s networks, stores and customer records, are still not totally combined, this is a company that hasn’t shown it does migration well.
OK, SprintNextel, you’ve thrown down the Wi-MAX gauntlet. You’ve got to execute, and I don’t only mean at the boardroom level. In the field. In the call centers. In your stores.
Final tip to SprintNextel: you know who executes as well if not better than anyone in a competitive telecommunciations environment? EarthLink, that’s who. If you are looking for best practices, follow their example. Maybe even make some of their staff an offer.
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
