Analysis: Is Sprint inching closer to an LTE announcement?
Sprint Nextel (NYSE:S) has repeatedly said it will clarify its 4G network strategy by mid-year, and with the end of June rapidly approaching, it appears that it may be time for Sprint to make an announcement about a switch from WiMAX to LTE.
Sprint has been using Clearwire's (NASDAQ:CLWR) mobile WiMAX network to offer service to its customers, but Clearwire's network buildout has stalled at around 130 million POPs and the company has lost the first-mover advantage it had over Verizon Wireless (NYSE:VZ). Sprint, which is Clearwire's largest wholesale customer, holds a 54 percent stake in Clearwire.
Sprint is holding an industry analyst conference at its headquarters in Overland Park, Kan., today and Wednesday. Sprint spokesman Scott Sloat told FierceWireless that the annual conference is not tied to any specific announcement, but said the company's Network Vision project will likely be a topic of discussion. Sprint executives have repeatedly said that the company could use the new multi-mode base stations that are part of the network modernization project to quickly deploy LTE.
But perhaps the most credible evidence that Sprint will soon be making a move to LTE is that Sprint also has reportedly inked a long-term network-sharing deal with wholesale LTE provider LightSquared. According to a letter Philip Falcone reportedly sent to investors of Harbinger Capital partners, which is backing LightSquared, LightSquared and Sprint will jointly develop, deploy and operate LightSquared's LTE network, and Sprint will become a significant customer of the network.
Sprint seems to be the most obvious fit, especially because no more than 25 percent of LightSquared's network capacity can be leased to Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T), and AT&T is in the process of trying to acquire T-Mobile USA. "LightSquared needs a dancing partner," Technology Business Research analyst Ken Hyers said. "Sprint is the obvious one."
Hyers said that he thinks the Sprint-LightSquared deal is a way for Sprint to lock up wireless capacity for the long term, even given the GPS interference concerns surrounding parts of LightSquared's L-band spectrum. "The argument here is that you are coming together and putting all of this into one single mega-network, and you can offer plans that no other operator will be able to match in terms of the amount of network capacity available," he said.
Of course, if Sprint migrates to LTE it is assumed that Clearwire will also deploy LTE. Clearwire spokesman Mike DiGioia said the company has nothing to announce on that front. However, he added that the company's network is technology agnostic, and that Clearwire has enough spectrum to deploy LTE alongside WiMAX without much difficulty. "The flexibility of our network really allows us to do what's best for our network and our customers no matter where the technology goes in the future," he said.
Hyers said he envisions WiMAX in a Sprint-Clearwire-LightSquared combination eventually going the way of iDEN, which Sprint plans to begin shutting down in 2013. "It hangs around as long as there is that excess spectrum but it doesn't receive substantial additional investment," he said. "Where they have WiMAX they maintain it." Hyers added that Sprint will likely make it easy for current WiMAX subscribers, especially those high-value customers who own devices such as the HTC Evo, to transition to LTE through device upgrades in the future.
Obviously, there are still a great number of unknowns in this scenario, and Hyers cautioned that Sprint and any potential partners will have to knit the network together. Further, LightSquared's GPS interference concerns could impair its spectrum, even though the company has said it will use a 10 MHz chunk of L-band spectrum in the lower portion of its spectrum holdings to launch its wholesale LTE network as a way to mitigate those concerns.
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