Sprint's Outstanding Overdrive

This year, wireless carrier Sprint Nextel (S) is expending a lot of effort to promote its Overdrive mobile broadband modem, which searches for wireless connections to high-speed WiMAX technology or 3G networks, then creates Wi-Fi connections for up to five devices. In one humorous ad, No. 3 U.S. carrier Sprint pokes fun at leader AT&T's (T) network congestion problems by suggesting iPhone customers use the Overdrive to watch videos.

The Overdrive will likely be the first of many devices made available by carriers that let computers and smartphones communicate with each other wirelessly. These wireless hotspots won't initially replace consumers' faster cable-modem connections. And users of basic DSL Internet service may blanch at the comparative cost—Sprint charges new customers $100 (after a $250 rebate and with a two-year contract), plus a $60-a-month data plan—compared with $20 a month for the slowest variant of DSL.

The Overdrive lives up to some of Sprint's marketing hype. The palm-size device, made by Sierra Wireless (SWIR), is a fantastic utility in cities where Sprint partner Clearwire (CLWR) has built out next-generation 4G coverage. But the coverage map remains woefully bare outside Texas and the Pacific Northwest. In most places, the Overdrive falls back on slower 3G connections that are subject to the same congestion problems other wireless carriers face.

Overdrive Test in Vegas

I tested the Overdrive in Las Vegas, where Clearwire has extensive coverage. Sprint's 4G network ably handled video downloads from the Hulu video site and served up Web pages at a faster clip than other 3G wireless modems I've used. At its top speed, video was downloading at about 2 megabits per second (Mbps); uploads occurred at half a megabit per second, about the speed you'd get with basic DSL service at home.

Once I booted up the Overdrive, which takes about a minute, it searched for a 4G network. If it can't find one, the device falls back to 3G, which slows the connection down to about 0.65 Mbps downstream and 0.2 Mbps for uploading data.

A small LCD screen on the Overdrive's front displayed the connection speed, which network I was using and how long I'd been connected, how much data I'd used so far that month, and how much data I'd used during that session. That's important because Sprint only lets users download or upload as much data as they want on its 4G network. With 3G, Sprint charges hefty fees for exceeding its monthly limit of 5 gigabytes of downloaded data and 300 megabytes of uploads.

Oddly, a Sprint promotional video suggests the Overdrive delivers "speeds that go where you go." Yet the device isn't truly mobile. Driving through Las Vegas below 30 mph, the connection stayed remarkably consistent. When I sped up, the Overdrive stalled; my connection was dropped. The linkage also can be lost as the device hands off its connection from one transmission station to another.

A Snap to Use

Like Verizon's MiFi Intelligent Mobile Hotspot, the Overdrive is a snap to use. Unlike USB and PC-card modems that require installing software on your laptop and can only handle one device at a time, the Overdrive creates a Wi-Fi network that let me connect a laptop, Sony (SNE) PSP, Apple (AAPL) iPhone, and Wi-Fi-enabled digital camera at the same time. Once I typed a numerical password displayed on the Overdrive's LCD screen into the gadget in question, the connection occurred immediately.

Of course, with the multiple radios the Overdrive uses to link your computers, battery life isn't great. Watching video yielded only about three hours of battery life. That's as the company advertises (and about an hour less than the MiFi yields). But for a product users will count on to get work done, that's not an impressive length of time. The good news is that I could plug the Overdrive into a wall outlet or connect it to a PC to recharge via a micro-USB cable.

Despite my quibbles, the Overdrive is a great device for businesspeople or other frequent travelers who want to share a data connection. Defeating those hotel Wi-Fi fees may make it worth the cost.

Before it's here, it's on the Bloomberg Terminal.