Backhaul Development for New WiMAX Partnership Likely to Start from Scratch

Implications: 1.      Many, if not all, of the backhaul folks at Sprint have been reporting to the IP group – in the same way that the transport group is also part of the IP department. 2.      It is logical that these individuals that were doing work on the backhaul will be the candidates for the next round of layoffs at the wireless carrier. 3.      It is possible that a total approaching10,000 people will be let go by Sprint in the next few months.

Analysis:  Now that Xohm is spinning off as a separate company, everybody at Sprint that was part of it will be going over to the new WiMAX alliance.  Sprint’s backhaul people were not in Xohm – they were working in Sprint’s core network.  There is a high probability that Sprint will now be walking away from these individuals.  It is not out of the question that they will be part of a total layoff of 6,000 to 9,000 people in the short term.   

Part of the reason for abandoning Sprint’s backhaul group involves ego.  Some of the executives on the Xohm side have been angling their way to the next VP-level position, which will become available as the spin-off starts building a whole new organization.   

Another reason for deciding not to bring on Sprint’s backhaul people is that most of them do not have a reputation for being the sharpest knives in the drawer.  Over the years, reality did not seem to jibe very well with their ideas.  

Way back in time, the group doing the initial analysis on backhaul came up with the notion that if they were to get Ethernet from alternate providers, it would be 1/80 of the cost per megabit compared to traditional LEC TDM capacity.  In actuality, it turned out that the discount did not really come close to that estimate.  In fact, in some cases, Ethernet may not even be cheaper than traditional T1.  They also found that the low-cost, truly shared, switched Ethernet did not meet the quality requirements they needed for a voice service because of latency, jitter, and congestion issues.  (It was not until much later that Sprint pulled back on doing voice with WiMAX.)  So, the cheap Ethernet, was not the high quality – and the high-quality Ethernet was not any cheaper.  In truth, what they started using was the Scintera solution because they did not want any TDMs.   So, a bunch of T1s was bought with a box put on them to make it Ethernet from the network’s point of view.  Of course, they were still the same T1s at the same price that they were always buying.    

After it was found that they could not get cheap Ethernet, the “Unified Backhaul Architecture” was created.  The concept was to build microwave everywhere.  Apparently, somebody looked at the cost of a radio and figured out that with some right of way, all that Sprint had to do was buy some radios and put them up --and it is going to be cheaper.  Well, then they were hit with the realities of microwave.   It is not always that easy to get tower space as well as the cable runs down the tall buildings.  

So, it appears that a new team at the new Xohm will take a fresh approach at achieving the goal of achieving cheap backhaul.  Perhaps what will go a long way in making it work is by having the cable TV companies in the partnership -- under terms where it can get relatively low-cost or wholesale rate Ethernet backhaul instead of at the commercial rate.