Early Briefing 08.17.07

As the company discussed its belated earnings, Fannie Mae predicted that housing prices will decline by 2 percent on average this year and by 4 percent next year. See story

* Washington investment firm Key West Partners buys Duvinage of Hagerstown, the nation's oldest maker of steel spiral staircases.

* Argon ST of Fairfax spends $20 million to acquire certain assets and liabilities of Coherent Systems International, a Pennsylvania firm that does research and development work for the defense industry.

* McLean's Capital One seeks permission to open seven new bank branches around the country, as it builds on its 2005 acquisition of Hibernia bank out of New Orleans.

Sprint's Barry West. (By Richard A. Lipski -- The Washington Post)

* And last but not least, Kim Hart sat down with Barry West, the chief technology officer of Sprint, to discuss post-merger challenges, WiMax and the iPhone. For a excerpts from the interview, keep reading.

Hart: What will consumers be able to do with WiMax that they can't already do with their cellphones?

West: The cellphone has evolved to become very complicated ..... with cameras in them and MP3 players in them. What we really want is all that functionality but in a high-class product, not something that's just a mixture of a lot of things that's very complex to operate. If you can imagine the functionality of the [Apple] iPhone with great access to the Internet, that's the kind of thing you'll be able to do. ..... The experience you get with a Blackberry is a great e-mail service, but it's not a great Web experience. But imagine having a device that does great e-mail, and with which I can literally see my family in live pictures and video. ..... It's the sort of thing we'll be able to do at an affordable rate. That type of functionality is what we'll be taking for granted in a few years' time.

Why did Sprint choose WiMax for its next-generation network?

We spent a lot of time researching the technologies. ..... I've always insisted that my technology team not become religious about technology. ..... You have to go for what delivers the best experience at the lowest cost so you can deliver value to your shareholders. ..... We looked at which technology would give us a global ecosystem that would support a new business model. That's the most important thing about Xohm. It's a new business model.

Today you also unveiled a new walkie-talkie service called Nextel Direct Connect that is designed to bridge the two networks. How will that be affected by past problems with the Nextel service?

I think this is a big day for us, being able to show push-to-talk on [Sprint's] platform with the same performance as the [Nextel] network. It's no small feat.

Why did you decide to use the Nextel brand, even after problems with Nextel network? Was there a concern that the perception of past problems would carry over?

No. Trying to do it the other way and produce a new push-to-talk brand would be really heavy lifting. Nextel is a verb, particularly in landscaping and construction industries. ..... This is absolutely the best way to secure that base of customers for a long time to come.

What is Sprint doing to invest in its current network?

This year we spent between $6-and-$7-billion on our current network. A lot of that has been in preparation of the retune of the Nextel network. But a lot of it was to increase our coverage. Obviously coverage is one of those things we have to keep investing in. As we become more successful with our customers, we have to invest in capacity. But the [WiMax] network inherently has so much capacity that we're not going to have to invest in capacity for a number of years.

What is Sprint's largest technical challenge at this point?

Since the merger, we've been facing a number of technical issues. Preparing the networks for the transition of customers from [Nextel] to [Sprint], building up the network so it will be robust enough for the [spectrum move], and addressing some of the coverage issues we had. At the same time, we had two companies with disparate billing systems and disparate back-office systems that we had to merge. ..... That has been the biggest challenge.

What impact has the iPhone had on Sprint's business?

I think the iPhone is the way Internet devices are going to go. ..... There was a lot of buzz about it, so we did see some activity where people left us. But that activity hasn't been a major drain on our customer migrations. ..... You're going to see those kinds of iconic products on the WiMax network almost from day one. The network just lends itself to that form and functionality. Simplification is really important, and you're going to see that on WiMax devices.

By Terri Rupar  |  August 17, 2007; 12:19 AM ET  | Category:  Morning Brief
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