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Sprint Uses Wireless Technology To Cut Costs

Sprint Nextel Corp. aims to become the first major cellular carrier to use the latest in wireless Internet technology to cut the cost of rerouting cell-phone calls through "backhaul" networks. The new measure will cut the cost of switching calls by more than two-thirds.

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.

Read the whole story at Business Week »

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