Analysis: What impact will Sprint’s WiMAX gamble have on munis?

The Washington Post has an interesting analysis of Sprint’s high-risk push into the WiMAX market. But one important factor The Post’s story overlooks is munis and the synergies they bring to the picture.The Washington Post has an interesting analysis of Sprint’s high-risk push into the WiMAX market. You’ll recall Sprint partnered with Clearwire on plans to roll out a national WiMAX network, ambitious plans indeed.

The Post, and the analysts it spoke with, question Sprint’s ability to convert customers to WiMAX. That’s a valid concern. EarthLink’s business challenges in converting customers from dial-up to wireless broadband demonstrate the difficulties in moving customers from one platform to another. But it’s entirely focused on the consumer market. A big factor that The Post overlooked is munis.

Sprint effectively entered the muni WiMAX market through its partnership with Clearwire. Clearwire is deploying a WiMAX network in Grand Rapids, Mi. Earlier this year, city officials in Grand Rapids applauded the Sprint/Clearwire partnership. In a news release, city officials itemized reasons why they believed the partnership was good for munis in general and Grand Rapids in particular.

So the market is there. Assuming that Sprint successfully builds out a WiMAX network, the company will be able to deliver a broadband pipe that is at least as desirable to munis as it is to consumers. In fact, munis could represent an even more logical market. Where WiMAX shines is on mobile applications. Those tend to be more compelling for cities which are supporting city workers and emergency response teams in the field than they are for consumers. And unlike consumers, who have invested in, and will be reluctant to scrap, perfectly good Wi-Fi enabled devices, cities with a compelling need of WiMAX’s long-range abilities can apply for grants and budget for the technology that best meets their needs. From the provider’s point of view, one city adoption could represent hundreds or even thousands of sales of mobile devices, as well as a considerable investment in infrastructure.

Of course, Sprint’s future direction may have no impact on munis at all. But that seems unlikely, as cities are turning more and more to private-public partnerships to deliver wireless services. If Sprint, in its partnership with Clearwire, capitalizes on the experience in Grand Rapids and chooses to court the muni market, it could emerge as a substantial contender for city contracts.

The future, as I see it, is really up to the munis in how they craft their RFPs. The choice between WiMAX and Wi-Fi is one of focus–whether to look to WiMAX as a solution for mobile services or to stick with Wi-Fi as the platform that is best suited to spur competition (thus reducing the cost of access) and, because Wi-Fi is pervasive but not costly, address the digital divide. I expect, more and more, we’ll be seeing a mix of technologies, using integrated solutions that incorporate a range of technologies to achieve a variety of goals.

To the extent that WiMAX helps munis meet those goals, we may see Sprint/Clearwire in competition for more and more RFPs.

I invite your comments.

Click here to read The Washington Post story.

Click here for a market update on WiMAX from the San Jose Mercury News.