Xohm's pricing plans increase chance of service's success

Sprint's WiMAX network has officially gone commercial in Baltimore with some interesting pricing plans that look to attack a number of segments--DSL/cable access, existing mobile broadband services and WiFi hotspots. It's a smart strategy given the fact that the service won't be ubiquitous for quite some time.

The new Clearwire, which aims to be combined with Sprint before the end of the year, is embarking on a WiMAX rollout that will be on a market-by-market basis with 140 million pops by the end of 2010. However, Maravedis [1] believes this coverage will be reached toward 2015 at the earliest. (Of course, I'm assuming that the new Clearwire will continue with Sprint's pricing strategy).

The smartest thing about Sprint's no-contract service plans is the Pick 2 plan, which enables customers to use the service as both a home Internet access service and a mobile broadband service. Subscribers lock in two devices, such as a modem and laptop card, for $50 per month. This should help alleviate the frustration surrounding poor coverage and a lack of a nationwide footprint on the mobile side as subscribers will still see the value in being able to plug in a self-provisioning modem and surf the Web from home with localized mobile broadband access.

I suspect, however, that the Home plan might be the biggest hit early on. The pricing, at $25 per month initially and $35 thereafter, is competitive with existing DSL and cable offerings. And the main advantage is the fact that the Zyxel modem Sprint offers is a self-provisioning modem, meaning subscribers plug in the modem and activate service via the Web. DSL and cable service can be activated the same way but often require a truck roll. Moreover, the Xohm service can be canceled at any time.

Here's a breakdown of Xohm's no-contract service plans:

• Home plan: Designed as a wireline broadband alternative that includes a self-provisioning Zyxel modem for $80 that plugs into any WiFi router. The plan is $25 per month for the first six months and $35 thereafter.
• On-the-Go plan: Designed as a competitor to existing mobile broadband. Devices include laptop cards, USB modems and the Nokia N810 tablet. Promotional pricing is $30 and $45 after six months.
• Daily-on-the-Go plan: Targets pay-per-use WiFi customers at $10 per day.
• Pick 2 plan: The most interesting pricing plan that allows customers to use the service as a home Internet access service and a mobile broadband service. Subscribers lock in two devices, such as a modem and laptop card, for $50 per month.

To be sure, Sprint faces a number of challenges as a greenfield WiMAX operator, including a lack of brand awareness, but the operator increases its chances of success by casting a wide net to target as many potential subscribers as possible.--Lynnette [2]