Even if AT&T-T-Mobile tie-up fails, Sprint still not in the clear

Even if the Justice Department succeeds in blocking AT&T's (NYSE:T) proposed $39 billion acquisition of T-Mobile USA, Sprint Nextel (NYSE:S) may still not be in the clear, analysts say.

"It essentially maintains the status quo, which, given the results of Sprint over the last couple of years, is not the best place to be," Christopher King, an analyst with Stifel Nicolaus, told The New York Times.

King argues that Sprint has already lost to Verizon (NYSE:VZ) and AT&T, but other analysts are more optimistic about Sprint's future as the company appears to be slowing down its subscriber losses. Moreover, the operator is expected to sell Apple's (NASDAQ:AAPL) iPhone with an unlimited data plan.

Still, the largest question mark facing Sprint is its 4G position, which the company is expected to give more details about next month. It needs a strategy that will enable it to build a 4G network that has broader coverage than its rivals. Right now, Sprint relies on Clearwire's WiMAX network, and Clearwire's rollout has slowed. It is also looking for more funding.

Sprint is shifting to LTE and recently signed a 15-year, $9 billion deal with LightSquared to share expansion costs and equipment. That deal, of course, is contingent on LightSquared gaining approval from the FCC to deploy an LTE network in the satellite L-band amid concerns that is operations would interfere with GPS signals.

Analysts say that with Clearwire and LightSquared, Sprint should have the spectrum it needs to build its network, but it is unclear how it will be able to make the investment to take advantage of this. Speculation has been that Sprint might acquire Clearwire outright.

For more:
- see this New York Times article

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