Sprint-Nextel (S) and its 4G Wimax partner Clearwire (CLWR) will launch their super-fast wireless broadband into the largest markets in the U.S. -- New York, Los Angeles, and San Francisco -- before the end of the year, according to the telecom firm. It may well be the litmus test that shows whether Sprint has any chance to pick up market share from rivals AT&T (T) and Verizon Wireless (VZ/VOD).
In theory, Wimax should have a huge audience -- Sprint says that it will reach 120 million people this year. The service is over ten times faster than 3G technologies. AT&T and Verizon Wireless will not offer the competing LTE products widely for over a year. It may be hard for consumers to imagine, but Wimax allows portable devices like smartphones and laptops to operate at speeds close to those provide by wired cable broadband.
Sprint faces several issues. The first is that the company has a poor reputation for customer service. That may be one of the reasons its subscriber count is frozen at under 50 million, while its two rivals continue to grow. Some consumers may simply wait for rivals to offer 4G because they do not want to do business with Sprint.
Further, how many people actually want 4G, even if the service is priced close to 3G? Most consumers who want 4G service will need a new handset. It's not clear which wireless services will benefit substantially from 4G. Video downloads almost certainly will, as will some data download processes. But the most popular uses of wireless devices -- for social networks, Twitter, maps, GPS, and voice -- may not work a great deal differently than they do over 3G networks.
The ultimate test of Wimax is likely to be very simple: Will it work well? The towers that carry the 4G service will have to be positioned to make the service seamless. Wimax will not operate outside most large cities for now. And, some metropolitan regions will not have the service this year at all.
Wimax looks extremely impressive -- on paper.