Can Sprint catch up on LTE?

Sprint Nextel (NYSE:S) claimed a first-mover advantage in 4G by leveraging Clearwire's (NASDAQ:CLWR) mobile WiMAX network. However, when Clearwire's network buildout stalled at 130 million POPs and Verizon Wireless (NYSE:VZ) launched LTE service in December 2010 and rapidly expanded its network to 200 million POPs, Sprint lost that advantage. Now Sprint is trying to catch up. The big question is, can it? 

I spent a few days last week at Sprint's headquarters in Overland Park, Kan., getting an update from Sprint executives on the carrier's Network Vision network modernization project. I'm fairly convinced Sprint can catch up on LTE, but the carrier will need a network and device lineup that matches those of its larger competitors if it wants to really be successful.

Sprint plans to cover 123 million POPs with LTE by year-end, and 250 million POPs with LTE by the end of 2013. That year-end 2012 coverage target is less than half of what Verizon is promising and less than AT&T Mobility's (NYSE:T) projected 150 million POPs. Still, it's a substantial network footprint, and, depending on which markets Sprint lights up, may be more than sufficient to create a competitive network.

What about devices? Sprint has promised at least 15 LTE devices by year-end, and Fared Adib, vice president of products at Sprint, said that most of those would be smartphones, with a few tablets and mobile broadband devices thrown into the mix as well. So far, Sprint's LTE devices have looked pretty solid, with high-end phones like the Samsung Galaxy Nexus and HTC Evo 4G LTE as well as mid-range products like the LG Viper.

Adib conceded that Verizon will have more LTE devices, but noted that after a certain point the difference between 15 devices and say 25 devices becomes less important. It's also worth noting that with a massive network and large LTE device section, Verizon has so far recruited less than 10 percent of its base to its LTE network.

Sprint's network will be operating at something of a disadvantage compared with Verizon and AT&T's networks. Sprint currently plans to deploy LTE Release 9 by mid-year on the G-Block of its 1900 MHz PCS spectrum in a 5x5 MHz block of spectrum, while both Verizon and AT&T are launching LTE in their 700 MHz spectrum with mostly 10x10 MHz blocks. Yet Sprint executives insisted that their network would be on par to the larger ones; both Verizon and AT&T promise average downlink speeds of 5-12 Mbps. While reporters were not allowed to conduct speed tests on Sprint's LTE smartphones, the performance I observed seemed just as good as that of LTE smartphones I've seen from Verizon and AT&T. Furthermore, Sprint has only has half as many customers as Verizon and AT&T, meaning fewer customers to clog its LTE network.

But what could really clog Sprint's network is also one of the carrier's key advantages in LTE: unlimited smartphone data. That could be a major draw for customers looking to get the most out of their flashy new LTE devices. As long as Sprint has prepared its network to handle that data, it could be a winner in terms of attracting subscribers to sign up. However, it's unclear whether the offer of unlimited data will be enough to separate Sprint from the pack. The carrier did well in the fourth quarter by pairing unlimited data with the iPhone, but some analysts expect Sprint to suffer in the first quarter. Sprint reports first-quarter results April 25.

Sprint is definitely playing catch up on LTE. Its network will be smaller, its device selection less ample and its network performance under the gun. However, if the network is reliable and can deliver speeds comparable to those of Verizon and AT&T, I see no reason why Network Vision can't deliver Sprint to the LTE Promised Land. --Phil