Investors spooked by Sprint's LTE plans

After disclosing that it will introduce LTE in its 1900 MHz band on Friday, Sprint Nextel (NYSE:S) saw its stock fall 20 percent, and Clearwire (NASDAQ:CLWR), which was cut out of Sprint's LTE plans, fell 32 percent.

Investors worried as Sprint said it would need to raise more money to build LTE. Clearwire is losing its largest wholesale partner, and Sprint has an end date in mind for sales of WiMAX phones that run on Clearwire's network. After rising as high as $3.39, Sprint's stock fell 60 cents to close at $2.41. Clearwire's stock fell 66 cents to $1.39.

Sprint revealed it will roll out an LTE network in the 1900 MHz band, turning on its first markets by mid-2012. In doing so, the operator is embarking on a complex plan that involves shifting its CDMA network around and stuttering the iDEN network.  

Bob Azzi, Sprint's senior vice president of networks, said during an investor conference that by the end of 2012, Sprint will cover 176 million POPs with 4G, a figure that includes 123 million LTE POPs, 120 million WiMAX POPs and 67 million POPs that will overlap. He said by the end of Sprint's Network Vision deployment at the end of 2013, Sprint will have 250 million LTE POPs covered and will continue filling in smaller markets with LTE at the beginning of 2014.

Sprint's initial LTE deployment will be in the G-Block of the 1900 MHz band, where Sprint has a nationwide 5X5 MHz block of spectrum, Azzi said. He said Sprint's G-Block spectrum will be combined with other 1900 MHz spectrum for its LTE service, and that the carrier currently has an average of 20-25 MHz per market nationwide in 1900. At some point in the future, Sprint also plans to use its 800 MHz for LTE; the carrier currently uses 800 MHz for iDEN but will begin moving those customers off that spectrum by 2013.

Sprint also plans to deploy CDMA 1X voice service in its 800 MHz spectrum and move CDMA traffic off its 1900 MHz spectrum. However, Sprint plans to decommission its existing iDEN service on its 800 MHz spectrum beginning in 2013. To get more capacity, Sprint also plans to introduce Wi-Fi offloading this quarter as well as new femtocells and optimization technology.

Sprint CFO Joe Euteneuer said the company plans to spend around $10 billion in 2012 and 2013 on deploying Network Vision and LTE as well as maintaining its legacy wireline and wireless operations. At the same time, he said Sprint will save $10 billion to $11 billion in operating expenses and capital expenditures from 2011 to 2017, including $4 billion from shutting down iDEN service.

For more:
- see this New York Times article
- see this FierceWireless article

Related articles:
Report: Sprint to launch LTE service in early 2012
Clearwire courts AT&T, Verizon and others as wholesale customers
Clearwire CFO: Vendor financing, spectrum sales could help fund LTE buildout
Report: Sprint board considers new investment in Clearwire
Sprint: LightSquared can end network-hosting deal over equipment upgrades

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