Sprint's ability to offer blazing peak speeds worries rivals, says Nokia exec

LAS VEGAS--Rival U.S. operators are concerned about the "peak wars" that Sprint might initiate using its vast 2.5 GHz spectrum holdings, said Mike Murphy, Nokia Networks' (NYSE:NOK) head of technology, North America.

"Because they [Sprint] have so much spectrum, they have the ability to offer very, very high bit rates," Murphy said.

Nokia has held "a lot of discussions" with its other carrier customers regarding ways they might compete against Sprint if serious marketing battles over peak data rates come to fruition, Murphy said during a breakfast meeting with a handful of reporters on the sidelines of CTIA's Super Mobility Week event here.

In the top 100 U.S. markets, Sprint has some 120 to 150 MHz of 2.5 GHz spectrum over which it is deploying TD-LTE service. The spectrum is key to Sprint's tri-band LTE Spark service, which also includes 800 MHz and 1900 MHz spectrum where it has deployed the FDD flavor of LTE. Though Spark currently produces peak downlink speeds of 50-60 Mbps, Sprint has said it will use two-carrier carrier aggregation by year's end to boost peak downlink speeds to more than 100 Mbps.

Last week, Sprint CEO Marcelo Claure said the operator still plans to deploy TD-LTE on its 2.5 GHz spectrum on a nationwide basis but is going to change its approach to initially target congested points of its network.

Not quite one year ago, Nokia, along with vendors Alcatel-Lucent (NYSE: ALU) and Samsung, was selected by Sprint to deploy TD-LTE equipment in the 2.5 GHz band. Regarding Spark's progress so far, Ricky Corker, executive vice president of North America for Nokia Networks, declined to share specific deployment details. "It's still ramping up, still building," he said.

Corker noted Sprint has pretty well wrapped up modernization of its FDD network (both CDMA and LTE) and is just now rolling out TD-LTE at 2.5 GHz. "Once that's built, they will have a strong position," he said. Further, Corker noted there is a solid roadmap for FDD-TDD carrier aggregation if Sprint opts to take that route.

Addressing other topics, Corker noted the second half of 2014 will be the busiest ever in the United States for the networks division of Nokia. Of course, Nokia Networks has only officially existed for four months, but the point is that even going back to the unit's previous incarnations as Nokia Solutions and Networks and Nokia Siemens Networks, it has never been busier than it is right now, thanks largely to LTE radio access network (RAN) contracts from Sprint, T-Mobile US (NYSE:TMUS) and U.S. Cellular (NYSE:USM).

Corker said Nokia's acquisition of Illinois-based infrastructure deployment firm SAC Wireless earlier this year highlights Nokia's continued focus on the United States as a primary market for its products. "It shows we will invest in the U.S. to build our business further here," he said.

SAC's acquisition is also part of Nokia's effort to rebuild its services business, which it previously shrunk down in search of profitability and better margins. Jorg Erlemeier, Nokia Networks' vice president, delivery, North America, said SAC filled a gap that Nokia had because, as an original equipment manufacturer (OEM), "we were not doing much to help operators get rid of the complexity" in their networks.

"The deployment is keeping operators awake at night," he added, because they must deal with numerous issues, such as site acquisition, permitting, engineering and actual buildouts. Further, as small cells start to get deployed on a massive basis, the challenges will grow exponentially.

SAC, Erlemeier said, enables Nokia to approach land owners on behalf of operator customers and deal with municipalities and site owners in ways Nokia never could before.

Erlemeier also said Nokia is working closely with operators to reduce the lead time for small cell deployments and find a suitable price point to enable the deployment of massive volumes of small cells. "If it costs us as much, almost as much, as a macro deployment, then nobody will deploy 500, or 1,000 or 1 million small cells," he noted. "If you get it cheap enough, then it will happen in terms of volumes."

Added Corker: "Is the small cell market growing as fast as we thought it would? No."

Both men agreed that technology is not a gating factor for small cells. Rather, site access and costs continue holding back massive small cell deployments.

Related articles:
Sprint tweaks 2.5 GHz LTE deployment strategy to target congested parts of network
Nokia lifts 2014 outlook for its networks business
Nokia scoops up infrastructure deployment firm SAC Wireless
Nokia makes big play for small cells with Mesaplexx buy
Nokia's new CEO Suri eyes use of new cash pile for future acquisitions
Sprint sparks Nokia's network resurgence