Sprint Uses Wireless Technology To Cut Costs
Each year, Sprint has to pay other network operators, called "backhaul carriers," to connect cell-phone calls over parts of a network that it doesn't control. As cell calls move from the nearest cell tower to a switching station, they zip along a fiber optic cable, then to the nearest tower. Those last few miles, sent along several T-1 lines, are the single most expensive network operating cost for wireless carriers, says one analyst.
Backhaul can account for as much as 30% of wireless network operating costs. At Sprint, this number was $20.1 billion last year. Sprint's new WiMAX network, which will be ready early next year, will help the company greatly reduce these costs. WiMAX will also likely provide the carrier with a new technology to use in offering high-speed wireless Internet access to their customers.
The backhaul business is booming as more cellular providers run more bandwidth-consuming content, like video and music over their networks. Cutting delivery costs is key to the future success of mobile content.