Wednesday, January 30, 2008

Sprint WiMAX "Functional Separation"?

With new reports out that Sprint might try to resurrect its failed alliance with Clearwire, this time perhaps with new minority investors (Intel, Google and Best Buy), one wonders whether Sprint ought to do what wireless operators are doing elsewhere and create a separate transmission company from which it can buy wholesale capacity.

Functionally separating retail operations and network functions might make sense in this case, given the other pressing demands for capital Sprint also faces. It isn't clear that Sprint derives significant competitive advantage from retaining ownership of the transmission facilities.

Best Buy might also be more inclined to invest in the new WiMAX network if such wholesale access were built into the investment agreements, as Best Buy might want to brand its own services.

Google is more interested in fostering an open networks environment and might not be that interested in any sort of Google-branded service. But wholesale access might be interesting if Google wants to experiment with applications that require such access, and wants to do so in a "real world" environment.

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