Wifi Revolution

Will Sprint (News - Alert) Nextel’s $5 billion gamble on WiMAX pay off?

The wireless carrier is planning to roll out its new nationwide WiMAX (News - Alert)-based service, Xohm, in 2008. This massive network initiative will bring advanced 4G wireless services, such as wireless television, interactive video, VoIP, instant messaging, music services and who knows what else to about 85 percent of the homes in the U.S.

The company is anticipating these new services to generate revenues of anywhere from $2 billion to 2.5 billion by 2010.

Pyramid Research will be providing full analysis of this ambitious plan in an upcoming report, “WiMAX Business Models: Will New Networks Ever Become Profitable?” The report will take a detailed look at Sprint's open-access WiMAX business model, including its likely sources of new revenue. The report will estimate the impact each of these new services will have on Sprint's top line and the profitability of its overall business model. Pyramid claims it has identified at least seven revenue streams that can emerge as a result of the convenience of an “always-on” network. Included are four categories for service revenue (data subscriptions, VoIP subscriptions, ad hoc usage and multimedia subscriptions) as well as revenue from equipment, wholesale and advertising. The report will also offer analysis of the economics and profitability of WiMAX deployments in different environments -- reviewing business models, cost considerations and pricing. It will offer three potential financial models, based on WiMAX deployments in emerging markets and developed markets as well as for enterprise use.

The report will be available in November 2007. To view the full analyst insight, click here.

For more information about Pyramid Research, visit www.pyramidresearch.com.

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Patrick Barnard is Associate Editor for Customer Interaction Solutions magazine and Assignment Editor for TMCnet. To see more of his articles, please visit Patrick Barnard’s columnist page.

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