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Wednesday, November 08, 2006

Real WiMax: Sprint's Last Stand (S)(VZ)

WiMax seems to some investors like a mirage. Out there in the future there will be a broadband signal that can blanket entires cities. Wide pipe for everyone. Democracy at work.

Well, if you stop into South Korea, it is really going on. Samsung has just released a device that can act as a computer and a phone, using a WiMax signal to feed it. The new gadget can even get TV. Of course, Samsung is not some wacky start-up that is trying to peddle new technology to the world. And, it is headquartered in a market where the government plans to offer WiMax throughout Seoul by the end of next year.

Samsung is one of the big backers of WiMax, along with Intel and Motorola. All three companies think there are big bucks in selling WiMax-enable handsets and infrastructure hardware to make WiMax systems work.

All of this is hopeful news for Sprint, the gang-that-couldn't-shot-straight cellular company that competes with Verizon Wireless and Cingular in the US market. Sprint's integration with NexTel has not gone well. The combined company's subscriber growth has been poor compared to its rivals.

But, Sprint is investing $3 billion to have a WiMax network in the US to handle its next-generation phones. This will put it on a different footing that its rivals who will continue to use the Qualcomm standard.

There is hope for Sprint, even if it is an ocean away.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
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