Is Sprint's Xohm the future? Philip Berne returns from Sprint's technology summit with impressions of WiMAX and the next generation of wireless.
Sprint yesterday hosted a technology summit near Washington, D.C. to lay out their next generation network plans. What we had previously been calling simply WiMAX will now be branded Xohm (pronounced zOhm), and branding was in fact a large part of their presentation, but was interesting nonetheless as it also pointed to a new pricing paradigm for wireless networks. We were on hand for the speeches, the product demonstrations and the network demos, and though we can't talk too much about the upcoming devices, we did get a good impression of WiMAX.
The technology
WiMAX has a few things going for it. First of all, the technology is very similar to existing Wi-Fi chips, and eventually WiMAX chipsets will even incorporate the LAN features of Wi-Fi. Though WiMAX chips are expensive today, Sprint believes they will eventually drop in price closer to what Wi-Fi chips cost today, which will lead to their ubiquity in electronic devices, as we've started to see with Wi-Fi. WiMAX is fast, similar to a good DSL connection, and in some cases better. Tests we've seen were very impressive, and will deliver an experience much more akin to real mobile broadband, if the device manufacturers can keep up. Sprint claims download speeds approaching 10 Mbps, though your mileage may vary. Interestingly, HSDPA, AT&T's high-speed network, could top out at 7.2 Mbps, which makes this high-speed network race look more like a long relay than a dash to the finish.
Another benefit of WiMAX, like HSDPA, is its global adoption. This isn't a dying or isolated standard, though it hasn't been as widely adopted across the globe as GSM, yet. The technology is nascent, and interest from heavyweights like Vodafone at least prove its viability.
The new price structure
Sprint imagines a market in which WiMAX is as ubiquitous as Wi-Fi today, if not much more so. To that end, a wide variety of devices were shown or discussed with WiMAX chips built in, from the obvious laptop computers and handhelds to cameras and Playstation Portable devices. If your TiVo uses Wi-Fi to connect to your home network, and then the internet, why not a WiMAX chip instead to connect directly? With so many devices using WiMAX, Sprint has envisioned a complicated and modular pricing structure. In a nutshell, the carrier is claiming an eventual end to subsidy models and long-term contracts. Or at least an end to deep subsidies, like we see today.
The idea is that so many devices you own will connect to the WiMAX network, you might just have an all-in plan that covers everything. Or, a digital camera might come with a 2-year subscription to Xohm that it will use only to upload photos to Flickr. Or, you might just buy access a la carte, as you currently can buy data by the hour from T-Mobile HotSpots. Most devices will allow you to sign up for service directly from the device, or a nearby computer, so you won't be dealing with Sprint stores or the Sprint sales force for most connected device purchases.
In any case, faced with the nightmare of subsidizing every device with a WiMAX chip in your house and in your pocket, Sprint instead sees an end to subsidies. Since the carrier will no longer subsidize devices, they won't be forced to charge early termination fees or lock customers into long contracts. Sounds great, right? Unfortunately, even though AT&T does not seem to be subsidizing the iPhone, they still charge an early termination fee if you break your 2-year agreement. We'll be surprised to see Sprint abandon the fees, unless consumers manage a coup.
The future?
We do like the idea of a flat rate to connect all our devices, especially as coverage improves nationwide, by about 2011. Still, we can see a sort of hybrid business model developing. We imagine buying a phone or handheld as a sort of hub for our network, and extending service to all the other devices around us. Sprint is claiming that their network will be available two years before their competitors, but this claim has little meaning yet. After all, at launch next year, only Chicago and the Baltimore / Washington area will have WiMAX coverage. By year end, many cities make the list, but coverage won't be nationwide even through 2010.
As for the other carriers, none have officially thrown their hat into the next-generation ring, though the group behind the GSM technology used by AT&T and T-Mobile has at least announced plans for the next step in their network. Called Long Term Evolution (LTE), the plan isn't even a working standard, so much as it is a set of goals in creating the next-generation HSDPA network. For the moment, as we mentioned earlier, HSDPA may be enough. Capable of up to 7.2 Mbps downloads and features like video conferencing and simultaneous data and voice, the best that HSDPA has to offer is better than anything we're currently seeing in the U.S., and we think this network could have a lot of life left in it. At the worst, it will be a fully matured standard as WiMAX is just starting to take hold.
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