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When Sprint Nextel, the third largest US wireless carrier, announced plans last week to roll out a new broadband wireless network based on so-called WiMAX technology, the loudest applause came from a group of Samsung executives sitting near the back of the room.
Samsung is one of three technology partners for Sprint Nextel, which plans to spend up to $3.5bn over the next two years building the new 4G network, which is expected to be available to about 100m Americans by the end of 2008.
The other technology partners are Intel, the US chipmaker, and Motorola, the US mobile phone maker, which, like Samsung, have invested heavily in the development and promotion of the Mobile WiMAX (802.16e) standard that will form the technological backbone of the new network.
For all three, Sprint Nextel’s decision represents an important validation of the broadband wireless technology as well as a valuable business opportunity. But for Samsung, and KiTae Lee, president of Samsung Electronics’ telecommunications network business, who was on stage with Gary Forsee, Sprint Nextel’s chief executive, the decision was particularly sweet.
Samsung, which developed a version of WiMAX dubbed "WiBro," helped Korean Telecom became the first the first wireless carrier to deploy the technology commercially when it launched a mobile WiMAX service in five neighbourhoods in and around the capital Seoul earlier this year.
“The KT service proves mobile WiMAX works,” says Hwan Chung, vice president of Samsung’s Mobile WiMAX marketing group in Samsung’s telecommunications network business unit.
Samsung demonstrates the service, which supports download speeds of between two and four megabits per second and costs $30-a-month, in a vehicle using a laptop PC equipped with a WiMAX data card. Aside from basic features like broadband web browsing and search, the service supports mobile video conferencing and multimedia services.
“Korea is an ideal test bed for new technologies like WiMAX,” says Mr Chung, who spends much of his time travelling overseas these days promoting the technology and Samsung’s expertise in its deployment.
Aside from the Korean WiBro services, Samsung is involved in WiMAX trials and "pre-commercial" deployments in Europe, the Middle East, South America, Japan and now North America.
In the US, Samsung will provide Sprint Nextel with dual-mode phones that will work on the wireless carrier’s existing network and the new WiMAX network. Along with Intel and Motorola, Samsung will also build the network infrastructure.
“Sprint Nextel customers will be able to experience a nationwide mobile data network that is designed to offer faster speeds, lower cost and greater convenience and enhanced multimedia quality,” said Mr Forsee.
Among the key advantages of WiMAX over competing 4G technologies is that since it is an internet protocol-based technology, the chips that support it are expected to be relatively inexpensive. It also uses precious wireless spectrum extremely efficiently.
“The WiMAX technology to be deployed in the network is expected to offer a cost per megabit and performance advantage that reflects a substantial improvement in the comparable costs for current 3G mobile broadband offerings,” said Sprint Nextel.
That in turn should enable carriers and new entrants like cable companies and satellite operators who are weighing the technology, to offer wireless broadband at relatively low cost.
Sprint Nextel for example, says prices will be considerably less than the $60-a-month it currently charges subscribers for unlimited access to its 3G EVDO (Evolution Data Optimised) network.
The mobile carrier plans to deploy WiMAX in the nationwide 2.5Ghz spectrum that it owns. Barry West, Sprint’s chief technology officer, said the US carrier evaluated a number of competing technologies before selecting WiMAX, including Flarion’s Flash-OFDM technology acquired last year by Qualcomm, and IPWireless’ UMTS-TDD technology, but said neither were “good fits”.
By selecting WiMAX, Sprint Nextel has also positioned itself to leapfrog domestic competitors. “I believe Sprint Nextel’s decision to deploy mobile WiMAX as the 4G network technology will set a milestone in the US telecommunications industry’s history and contribute to further advancements in wireless technology,” said Mr Lee. “Mobile WiMAX-based services will create a new paradigm shift in wireless services and improve consumer lifestyles.”