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Sprint's Big Pipe Dream

Updated from 7:09 a.m.

Sprint's (S) condition looks so dismal that an all-or-nothing bet on an unproven wireless technology is actually shaping up as a bright spot.

Tuning out the static surrounding its repeated stumbles, Sprint late last month announced a major expansion of its wireless broadband project. After originally targeting Chicago and Baltimore, Sprint now says it will launch the so-called 4G service in 17 additional cities by the end of 2008.

Sprint has budgeted about $2.75 billion for the effort, effectively doubling down on a not-yet-standardized wireless format known as mobile Worldwide Interoperability of Microwave Access, or WiMax. Theoretically, the new network will soon deliver the sort of speedy mobile Internet connections that people now enjoy at their desktops.

The bold 4G strategy would give the No. 3 wireless shop at least a one-year lead on telcos like Verizon (VZ - Get Report) and AT&T (T - Get Report), and help Sprint stand out from the broadband pack that includes cable giants Comcast (CMCSA - Get Report) and Cablevision (CVC - Get Report).

"WiMax is our future," says one Sprint insider who is involved with the decision. "There's no margin for error. It's not like we can say 'we gave it our best effort' and then move on."

Sprint has enlisted tech titans Motorola (MOT), Nokia (NOK - Get Report) and Samsung to provide the network equipment and the devices that will work with the mobile WiMax systems. Using licensed spectrum in the 2.5 gigahertz range, Sprint will have the ability to eventually cover about 90% of the U.S. markets, say analysts.

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CMCSA $55.94 0.00%
CVC $18.08 0.00%
NOK $7.70 0.00%
S $4.72 0.00%
T $32.75 0.00%


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