Sprints Decision Could Wound MMDS Market

Sprint's announcement that it would stop adding customers to its fixed broadband wireless network could hurt an already struggling market.

Sprint said on Wednesday, Oct. 17, that it would stop adding customers to its fixed broadband wireless network. The Multichannel Multipoint Distribution Service industry leader had already halted its build-out of new markets while it examines second-generation gear.

The announcement could hurt an already struggling market. "It has an affect on the financial environment in terms of how much short-term credibility the market has," said Cristian Parrino, vice president of marketing of Spike Broadband Systems, an MMDS equipment supplier.

Parrino was quick to point out, however, that international operators and even some MMDS licensees here could be in different positions to continue moving forward. Some operators, such as Spike customer Sonofon in Denmark, use MMDS as their only tool to reach customers with high-speed data solutions. Such operators have more pressure to roll out competitive service with the available equipment.

Sprint has other technologies and businesses, so it can fall back on those while MMDS technology is further developed. "Sprint is probably the only one that can afford to wait and see what happens," Parrino said.

Sprint will continue to maintain and provide service to its current customer base while it looks at next-generation opportunities, a process that will probably last throughout next year, a representative said. Using original MMDS gear, Sprint must send a technician out to customer homes to install antennas. That expensive process doesnt help the bottom line.

Vendors are developing next-generation gear aimed at allowing end users to buy equipment at retail outlets and install the system themselves.

WorldCom, another major MMDS licensee, has also stopped building out new markets, but hasnt announced that it will discontinue adding new customers. While Sprint targets residential users, WorldComs customers are small and midsize businesses. "Thats a less price-sensitive segment," Parrino noted.