Sprint says it won't subsidise WiMax hardware

Chicago (IL) – Barry West, president of Sprint’s Wimax unit “Xohm”, said that Wimax customers will have to pay “full freight” for their Wimax cards, but will not be locked in long-term service contracts in return.

During his keynote speech at the Wimax World USA 2007 conference, West told the audience that the company’s Wimax strategy will be departing from the traditional sales model of cellphones or current wireless broadband cards. Instead of subsidizing the hardware with a long-term service contract, the company will be charging the customer the full price of the Wimax device.

This move allows the company to drop the 2-year service agreement as a requirement when customers are purchasing hardware, as the company can make a profit at the time a customer buys the card. “You don’t owe me anything, I don’t owe you anything,” West said and mentioned that this model will allow customers more choice when selecting Wimax service.

Xohm will offer a pay-as-you-go service model, allowing customers to pay for their broadband access based on their preference of a time frame. “You simply buy the device, you turn it on, you activate it and you are ready to go,” West said. “Essentially,” the executive said, “now you are the customer, not the device itself.”

The company stopped short of revealing how much it will actually charge for Wimax access. West said that pricing details are likely to be announced in the first quarter of next year, but, in general, the company intends to be a “value play.” However he also noted that Xohm service will be split into tiers that will provide different data rates for different price levels.

The executive did not provide any further information on what these data rates and relating prices could be - Intel is pushing Wimax service providers to offer connectivity for less than $30 a month – but said that the average user should see a downlink speed of “about 3 to 5 Mb/s” and uplink speeds of about “1 to 2 Mb/s.”