Sprint on Monday launched a device called the Airave in Denver and Indianapolis that will boost the wireless company's coverage in homes.
Samsung makes that Airave, a "femtocell," or a compact base station that hooks up to your broadband connection. The rollout is limited for now. All of Denver and Indianapolis will have service later this year along with Nashville. All customers will have Airave service in 2008.
The base station will work with any Sprint phone and provide unlimited calling. According to Sprint, Airave won't gobble up wireless minutes and works with any Sprint phone. The device will cost $49.99 and service will run $15 a month for individuals and $30 for families. These costs are in addition to Sprint wireless service.
Sprint's effort sounds similar to T-Mobile's @Home service. The idea: Use Wi-Fi and home Internet connections to expand a network where coverage is lacking in areas.
While there are benefits to the Airave the economics for the customer are a bit unclear. Sure you save wireless minutes, but you could get VOIP service for the $15 a month it would cost an individual.
Meanwhile, I'm left with this question: Yes, the device is cool, but shouldn't my Sprint phone just work indoors anyway?
Separately, parent company Sprint Nextel is under fire. In a research note on Monday, J.P. Morgan analyst Thomas Lee wrote that Sprint's third quarter is likely to be "sloppy" amid tough competition, high costs and subscriber losses on Nextel's iDen network, which have offset gains on Sprint's CDMA network.
Anxiety has risen in recent weeks regarding Sprint Nextel 3Q results as investors weighed whether 3Q is worse than previously telegraphed. Two years after this merger closed, a sloppy quarter raises one of two logical questions for investors: (a) whether this management team is the right one to
lead this merger, and (b) should the company consider unwinding this merger considering iDen has lost 3mm users in the past two years.
A big problem: Sprint Nextel is bloated. Lee said Sprint's cash costs per customer is $44.10 a month compared to $28 for Verizon Wireless, $32 for AT&T Wireless and $36 for T-Mobile.
No new device will change that cost equation.