Speaking of innovative delivery of connectivity to rural communities, Sprint yesterday made a very large announcement about an investment in WiMax. According to Reuters they will spend up to $3 billion, and I have heard reports of up to $4 billion in spending in this effort to build out nationwide wireless broadband by 2008.
“Imagine accessing YouTube.com and MySpace.com literally on the fly,” Sprint Chief Executive Gary Forsee told a news conference, referring to the popular online video and social networking sites.
Imagine that– a telecommunications executive not bitching about how people aren’t paying enough for his pipes but rather being delighted at the notion of delivering connectivity and value to customers.
Some commentators have questions the ability for Sprint to make a profit following such a capital investment, but I have to contrast this effort with some efforts to bypass the local exchange carriers in the past. Specifically I’m contrasting this $4 billion in capital investment to the around $100 billion pre-SBC AT&T spent to buy cable companies TCI and MediaOne in the late 1990s. At the time I actually thought AT&T’s strategy would pay off, and I think Wall Street unduly beat up on then AT&T Chairman C. Michael Armstrong, forcing him to tear down this strategy. Thanks to the progressive march of technology Sprint will get to bypass the ILECs for around 4 percent of what AT&T once spent. If Sprint can market the service well I think they’ve got a good shot at making this profitable in short order.
Also, keep in neutral, Sprint. Stay classy, San Diego.
