Since its merger with Nextel, Sprint’s been sitting on a huge amount of 2.5GHz spectrum across the US, and its long-held intention has been to use it to build out a nationwide mobile broadband network. After testing or evaluating nearly every suitable technology out there, the company announced today that it will use mobile WiMax, giving the technology a huge boost. Sprint plans to roll its network out by the end of 2007, with more significant coverage in 2008, offering download speeds of 2-4 Mbps (which sounds like a welcome dose of reality to all the grandiose claims about WiMax we’re usually treated to).

Despite a lot of speculation that Sprint would choose either Qualcomm/Flarion’s Flash OFDM or IPWireless’ UMTS TD-CDMA (which probably didn’t deserve to win solely on the basis of that acronym), mobile WiMax looks to be the right choice for the company. Its executives used the word “ecosystem” several times to describe the environment surrounding mobile WiMax, and Bin Shen, the company’s VP of broadband strategy, reiterated the point on a conference call with me: Sprint wanted to choose a technology based on an open standard that invited and allowed for competition, to help drive costs down throughout the network, from chipsets to network equipment to devices; it also wanted a standard that would be widely adopted. Part of what makes this the right decision for Sprint is that with this choice, it’s made a significant step towards creating a mobile WiMax market, and will certainly influence other operators to take a strong look at the technology. It’s also given itself a strong leadership role in mobile WiMax’s continuing development — for instance, it’s working through the WiMax Forum with other operators to define a “Wave 2″ profile of the technology to meet its desires and demands.

There’s some unspoken subtext here, too though: The idea of adopting a second technology, in addition to CDMA, that’s controlled by Qualcomm probably wasn’t particularly attractive. The big Q’s royalty system hasn’t won it a lot of friends (apart from happy investors), and it’s currently experiencing some discord with operators in emerging markets who feel its royalty demands, particularly on mobile handsets, and chip pricing inhibit their ability to compete with their GSM rivals. WiMax addresses all those factors — the technology isn’t controlled by a single entity, and nobody holds a commanding about of the IP behind it. This means there’s going to be a lot more competition, and Sprint’s fortunes won’t be as tied to one outside company.

Some other interesting points: Shen talked about how the WiMax network will be complementary, both to Sprint’s existing cellular networks, but also to fixed broadband networks, particularly those of the cable TV companies it’s partnered with. He said that the carrier wants WiMax chips in its devices to also support Wi-Fi, while it’s focusing on creating a network whose real value is in mobility, not necessarily in fixed wireless usage. Also, he mentioned billing access to the network on a per-household basis, rather than per device — this will be necessity if Sprint and it’s vendors’ vision of millions of connected electronic devices is to come true. It’s also an interesting pricing model that could shake up mobile operators a bit.

Without a doubt, Sprint has quite an undertaking before it, not the least of which convincing investors unhappy with its recent results that it’s worthwhile to drop a few billion on a new network with a somewhat unproven technology when it’s also upgrading its existing EV-DO network. The new network is being pitched as a data network that will connect all sorts of electronic devices, rather than a straight replacement for EV-DO, which will still be used to provide voice functionality. Key to its success will be getting WiMax into those devices, but also coming up with applications and services people will want to use. Sprint does enjoy the highest data spending of US operators, but on the whole, mobile carriers haven’t done the greatest job in developing compelling uses for their networks — for instance, it was slightly disheartening to hear Sprint’s CEO go through several scenarios based on video calls or video chat, given that’s something telecoms have tried to introduce so many times with so little success. But by expanding connectivity beyond mobile phones and into other devices, I’m optimistic that the WiMax network will serve as an open platform that electronics manufacturers and developers can use to craft their own services and apps.

I’d also venture this sets the stage for some sort of more detailed tie-up between Sprint and a South Korean operator. SK Telecom has been expanding overseas, and is the likely candidate, given its role in MVNO Helio, which uses Sprint’s network, as well as its expertise in both EV-DO and WiBro, a variant of mobile WiMax.

One final point: you have to love the timing of this big Sprint announcement, the day before the FCC kicks off its huge spectrum auction. I’m guessing this isn’t a coincidence, but rather a reminder to all the would-be entrants to the wireless business of both the investment required to build a nationwide network, and also that the incumbents aren’t going to sit idly by as they roll out their flashy new networks. We’ll see if it scares anybody off.

[tags]mobile, sprint, nextel, wimax, wibro, 4g, qualcomm, intel, samsung, motorola[/tags]

—–>Follow us on Twitter too: @russellbuckley and @caaarlo