Will Sprint eventually shut down iDEN?

Phil GoldsteinBased on recent comments from Sprint Nextel (NYSE:S) on its planned network modernization project, I think the carrier may, at some point in the future, shut down its iDEN network.

Specifically, Bob Azzi, senior vice president of networks at Sprint, recently said that part of the carrier's planned network overhaul includes creating a vastly improved push-to-talk service on its 1900 MHz CDMA network. The carrier also plans to deploy CDMA 1X Advanced voice services in its 800 MHz spectrum (where iDEN sits), and deploy new multi-mode base stations that can support CDMA 1X, EV-DO, WiMAX and LTE. As a byproduct of the project, Sprint hopes to decrease the number of its cell sites from 66,000 to 46,000.

It appears iDEN is nowhere in the carrier's plans.

Sprint spokesman Scott Sloat told me the company plans to continue to support iDEN. "The push-to-talk capability on iDEN is better than anywhere else, and so we're still committed to providing that to our customers," he said. "We have no current plans to decommission iDEN."

Nonetheless, iDEN isn't receiving attention. Noticeably absent from Sprint's new multi-mode base station is support for an iDEN radio card. And if Sprint wants to migrate iDEN customers to PTT service on is CDMA network, and it use its 800 MHz spectrum for CDMA 1X Advanced voice service, where does that leave iDEN? Moreover, as BTIG analyst Walter Piecyk pointed out to me, if Sprint cuts 20,000 cell sites over the next several years, can it do that and keep its iDEN network intact?

Sprint’s iDEN subscriber base has declined from around 17.6 million at the end of 2006 to around 13 million at the end of 2009.Sloat declined to comment on the cell site question, noting that Sprint is still in the planning phase of the project. He said Sprint does not currently have any plans to forcibly migrate customers from iDEN to CDMA. After all, Sloat pointed out, Sprint is still releasing iDEN phones. 

But if Sprint eventually decides to shut down its iDEN network, the move could have profound implications for the construction workers, dispatchers and others who use the service, as well as for iDEN network and handset supplier Motorola (NYSE:MOT). But it would most directly affect Sprint--at the end of the second quarter, Sprint counted 11.6 million iDEN subscribers out of its total base of 48.2 million. Clearly, those remaining iDEN subscribers are a key constituency; they have stayed loyal to Sprint even as millions of other subscribers fled the carrier during the past three years.

However, in the second quarter (when Sprint recorded its first net wireless subscriber gain in three years), Sprint's CDMA network added almost 136,000 postpaid customers while iDEN lost almost 364,000 customers. The company gained also gained 173,000 prepaid subscribers, which included net additions of 638,000 CDMA customers, offset by net losses of 465,000 iDEN customers. CDMA appears to have the momentum.

Of course, this isn't the first time Sprint has faced questions about iDEN. Indeed, last year the carrier reassured iDEN proponents it would continue to support the technology.

Azzi said the carrier's network evolution plan is meant to "future-proof" Sprint's network. To me, if you read between the lines, it looks like that future will not include iDEN. --Phil

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