Sprint's 4G strategy condemns it to spectrum famine
Sidelines Clearwire and will build LTE in its own PCS band, but is now well behind Verizon and with difficult timing on refarming
Published: 10 October, 2011
READ MORE: Spectrum | US | Sprint Nextel Corporation | LTE
Sprint's much delayed announcement of its 4G strategy saw the third US cellco distancing itself from its spectrum-laden joint venture, Clearwire, and adopting a go-it-alone approach to LTE, which relies on uncertain partners like LightSquared, and turns the operator into a spectrum Cinderella overnight.
This is what counts for 'vision' at a carrier whose maverick status, like that of a bright teenager, can quickly turn from interesting to irritating. Sprint had signposted on numerous occasions that it would sideline Clearwire in its strategy, despite the venture's own commitment to migrate to LTE, and might even break with it entirely once the two companies' contract expires late next year. But there were lingering hopes that it would see sense at the last minute, and we have to hope that the announcement is a gambit to collapse Clearwire's value and open the way for a cheap buy-out, otherwise the logic is severely lacking.
Sprint may not have much influence on the broader wireless world, because of its also-ran status and offbeam technology and spectrum positions. But in the US it had held out the hope of creating a genuine third way by pursuing the MVNO model it had pioneered there to its logical conclusion - a huge wholesale network which could support a wide range of small operators and non-telco brands, creating a collective alternative to Verizon and AT&T, which are virtually unchallengable with a conventional mobile model. Now - unless there is a hidden agenda for Clearwire - Sprint has dashed those hopes, and condemned itself to irrelevance even in its home country.
This is because, if it does ditch or distance Clearwire, it will go overnight from having over 100Mbps of spectrum per market and a 4G headstart to being the laggard, behind far richer and more focused competitors, notably Verizon. Admittedly, the spectrum wasn't in the ideal band for all markets, it was unpaired, and it was fragmented in many areas, and the headstart was achieved with a technology which has been leapfrogged by LTE and now needs to be upgraded. But the 'Sprint 4G' services and handsets have been the only positive note in the cellco's desperate failure to reverse decline on the postpaid front, and without them, the company will have to rely even more heavily on its main source of growth, the cut-throat prepaid segment - at least until it has its own LTE network. And that will have disadvantages of timing, frequency and marketing budget compared to the storming progress of Verizon Wireless.
Commentators made much of the "aggressive" pace of Sprint's accelerated LTE roll-out plan in its PCS spectrum, but that still involves a launch date of late 2013, three years after Verizon's. By then, the senior CDMA operator will have covered its entire 3G footprint for a year and the older technology will be close to a distant memory.
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