Sprint Nextel (NYSE:S) CEO Dan Hesse said the carrier has sold 1 million LTE devices so far, even though its LTE network is tiny compared with the LTE networks of its larger competitors.
Click here for an image from Sprint of its LTE devices.
Speaking at the Goldman Sachs Communacopia Conference, Hesse said Samsung Electronics' Galaxy S III and HTC's Evo 4G represent the bulk of Sprint's LTE phone sales. He said customers are attracted to Sprint's unlimited smartphone data plans and the fact that Sprint will expand its LTE network significantly over the next year-and-a-half.
Sprint launched its LTE network in July in a handful of markets, but the carrier expects to cover 123 million POPs by year-end. Meanwhile, Verizon Wireless' (NYSE:VZ) LTE network currently covers 75 percent of the U.S. population, around 235 million POPs, and the carrier plans to hit 260 million POPs by year-end. At the end of the second quarter Verizon counted 10.9 million LTE connections (it launched LTE in December 2010). AT&T Mobility's (NYSE:T) LTE network covers more than 75 million POPs, and the carrier plans to expand that to 150 million POPs by year-end.
Earlier this month Sprint said it was preparing 100 more cities for LTE, including Boston; Chicago; Indianapolis; Los Angeles; Miami; Nashville, Tenn.; New Orleans; New York; Philadelphia; and Washington, D.C. The company believes that by announcing these 100 more markets, customers will see that they can buy an LTE iPhone now with an unlimited data plan and take advantage of the LTE speeds when their market launches later this year.
Hesse said Verizon has a "temporary" advantage because of its sizable LTE footprint when it comes to marketing Apple's (NASDAQ:AAPL) iPhone 5, which can run on LTE networks. However, he said Sprint wants to keep the focus on the differences in the carriers' pricing plans, noting that both Verizon and AT&T's shared data plans make it more complicated for customers to keep track of how much data different family members are using. He said it is "very good for us that the brand positioning is beginning to get very differentiated."
"We believe that consumers want peace of mind and that insurance," he added. "We provide that as part of unlimited."
The Sprint chief also touched on several other issues, including the carrier's Network Vision network modernization plan. He said that the plan is proceeding well and that it will give Sprint a strong spectrum position through the end of 2014. He said that date will be extended to 2016 with the addition of spectrum from Clearwire (NASDAQ:CLWR). Sprint plans to offload some of its network traffic to Clearwire's planned TD-LTE network. Hesse also said Sprint is still open to hosting other companies' spectrum--including Clearwire's--on its network architecture.
Regarding consolidation, Hesse reiterated that he would prefer it if Sprint focused more on executing the Network Vision plan through the middle of 2013 than worrying about mergers and acquisitions. However, he said he thinks some kind of deal between wireless carriers is going to happen. "I do think there will be consolidation," he said. "I would hope and expect that over the long term Sprint will take a very active role in that."
Hesse also touched on the FCC's plans to review its rules for how much spectrum a carrier should be able to hold (plans that AT&T CEO Randall Stephenson applauded earlier at the Goldman Sachs conference). Hesse said that the rules could be changed to give carriers very clear indications of when a deal might put them over a cap on how much spectrum they could hold in a market, and then what spectrum they would need to give up to get under the cap. He said he approved of changes that would give lower-frequency spectrum more importance.
"One of the issues that the FCC has to grapple with is that spectrum is a limited resource," he said. "And in that regard they don't want to be in a position where AT&T and Verizon can buy all the spectrum that becomes available in the market."
Finally, Hesse waded into the discussion about whether Microsoft's (NASDAQ:MSFT) Windows Phone could be a strong competitor to Apple's iOS and Google's (NASDAQ:GOOG) Android. Hesse said he preferred markets where there are three strong competitors, but that "time will tell" if Windows Phone will be successful. Notably, Sprint was not among the carrier partners HTC named for its new Windows Phone 8 smartphones--supporters include Verizon, AT&T and T-Mobile USA. Hesse said that if Microsoft can leverage its dominant position in the desktop PC market into mobile devices, it has "potential to be a player."
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