"Overdrive" to Drive Sprint 4G - Analyst Blog

Sprint Nextel (S) has confirmed that it will market the new dual-mode (operating on 3G and 4G networks) wireless router called “Overdrive” in the US. Manufactured by Sierra Wireless (SWIR), the device will be available exclusively for Sprint’s high-speed wireless customers starting January 10, 2010, for $99.99 after a $50 mail-in-rebate under a two-year service contract. The unlimited 3G/4G data plan will cost $60 per month.

The upcoming 3G/4G router enables users to seamlessly and simultaneously connect up to five Wi-Fi (wireless broadband) devices to Sprint’s high-speed mobile broadband network. The devices that can access high-speed services include laptops, gaming consoles such as Microsoft’s (MSFT) Xbox 360, cameras and smartphones. Moreover, Overdrive provides users access to the Internet via Sprint 3G EV-DO network in areas not covered by the carrier’s 4G network.

Sprint will launch the Overdrive in ten US cities initially, with more markets to follow in 2010. The company plans to market the novel 3G/4G hotspot device in collaboration with electronics retail chain Best Buy (BBY). Microsoft also supports the launch of the intriguing device.

Sprint offers its 4G service under the “Sprint 4G” brand and leverages the WiMax (a mobile broadband technology) network operated by Clearwire Corporation (CLWR) in which it holds a 51% stake. The 4G WiMax network offers up to 10 times faster throughput level than the existing 3G deployments. The downlink speeds enabled by the 4G WiMax network averages 3−6 megabits per second (Mbps), with peak speeds exceeding 10 Mbps.

Sprint made history by becoming the first US carrier to deploy 4G mobile broadband services in the US, with the commercial launch in Baltimore in October 2008. The company’s 4G services now cover 27 markets in the US. Sprint promises to continue the aggressive network deployments through 2010, with 4G service launches in the key US markets of Boston, Houston, New York, San Francisco and Washington, D.C, addressing 120 million people.

The Sprint−Clearwire joint venture represents a response to the emerging 4G wireless broadband standard known as Long-Term Evolution (“LTE”) that has demonstrated higher network speeds than the WiMax in technical trials. Sprint’s larger peers AT&T (T) and Verizon (VZ) are warming up to deploy their respective 4G LTE networks in the 2010−2011 timeframe.

Nevertheless, the 4G WiMax service is expected to play a critical role in Sprint’s survival in the US wireless market, given its continued market share losses to larger rivals. Overdrive, which is tailor-made for bandwidth-intensive applications (such as HD video streaming), is expected to boost Sprint’s 4G business by enticing more customers through expanded network accessibility and coverage.