Sprint: $2B-$2.5B in revenue from WiMAX

Sprint: $2B-$2.5B in revenue from WiMAX

	Published : Fri, 17 Aug 2007 11:28 By : Agencies Print this Story

VIENNA, Va. (AP) - Sprint Nextel Corp has laid out its financial targets for its WiMAX wireless broadband network, saying it expects revenue of $2 billion to $2.5 billion from the network in 2010.

The No. 3 wireless carrier is spending $2.5 billion through next year to build a WiMAX network it hopes will differentiate itself and draw new customers. It will spend $5 billion through 2010.

It expects the network to post positive adjusted operating income before depreciation and amortization in 2010 and positive free cash flow a year later.

'WiMAX has the ability to transform the marketplace,' said Paul Saleh, chief financial officer of Sprint.

The WiMAX business will carry the Xohm brand, Sprint announced here at its Technology Summit conference.

The cost of building the network has drawn some skepticism from analysts who believe management should be focusing on its current operations. But a WiMAX network would leapfrog other carriers in terms of connection speeds.

Saleh defended the move. He said the WiMAX deployment is cheaper and covers more people than Verizon Communications Inc.'s FiOS fiber project or AT&T Inc.'s U-Verse Internet TV service.

He also noted that the capital budget for WiMAX is lower than the estimate given earlier this year as a result of its partnership with Clearwire Corp.

Clearwire isn't the only ally. Sprint has partnered with Intel Corp., Samsung Electronics, Motorola Inc. and Nokia Corp. in the build-out. It also struck a deal with Google Inc. for its mobile search capabilities.

Barry West, who heads the WiMAX business, said the partners have committed to putting out 50 million devices, from cell phones to laptops with WiMAX chips.

West said the model of embedding chips that can access the WiMAX network gets away from the old subsidy model of giving phones away.

'I'm absolutely convinced this model will work,' West said. 'It is a completely new, game-changing model.' Chairman and Chief Executive Gary Forsee said that the various partners will help 'create demand for WiMAX services.'

Sprint Nextel shares fell 33 cents, or 1.8 percent, to $18.30 in early afternoon trading Thursday. The communications company is based in Reston, Va.

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