Sprint's 4G Strategy Raises More Questions Than Answers

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After months of waiting Sprint Nextel's (NYS: S) management team finally unveiled its LTE deployment strategy Friday at an investor conference. But the plan left me with more questions than answers.

Since last year, Sprint has said that the crux of its Network Vision network overhaul is new multi-mode base stations that will allow it to deploy multiple technologies on multiple network frequencies, all with one network architecture. The company has talked about the cost savings it will receive from shutting down iDEN service in its 800 MHz spectrum starting in 2013 as well as moving iDEN customers to its 1900 MHz PCS spectrum. As it moves iDEN customers off of 800 MHz, Sprint also plans to launch CDMA 1X Advanced voice service on those airwaves. 

Now that LTE has been thrown into the mix, it looks like Sprint's transition to LTE will add even more complexity to this strategy. Sprint said its initial FDD LTE deployment will occur in mid-2012 and will be in the G-Block of the 1900 MHz band, where Sprint has a nationwide 5X5 MHz block of spectrum. That spectrum block does not seem like it will be sufficient to handle much LTE data traffic. But Bob Azzi, Sprint's senior vice president of networks, said Sprint's LTE deployment will combine the G-Block spectrum with other 1900 MHz spectrum. Sprint currently has an average of 20 MHz to 25 MHz per market nationwide in the 1900 MHz block, however, it's not clear when Sprint will be able to make some of that 1900 MHz spectrum available for LTE and how this transition will interlock with all of the other spectrum transitions Sprint plans to make.

Azzi said 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 when Sprint's Network Vision deployment is complete at the end of 2013, Sprint will have covered 250 million LTE POPs and will continue filling in smaller markets with LTE at the beginning of 2014. Will all of these customers be using the 5X5 G-Block channel or will some be using the 1900 MHz spectrum? Sprint didn't say.  

Additionally, Sprint executives said that at some point in the future, the company also plans to use its 800 MHz for LTE. However, Sprint still plans to keep the iDEN network in use through 2013 as it migrates more customers to CDMA services. It seems likely that Sprint would not be able to use 800 MHz for LTE until 2013 at the earliest since the carrier will need FCC approval to launch LTE service in that spectrum band.

What happens to Sprint's LTE network in the meantime, and will it be competitive? These questions are particularly apt considering Verizon (NYS: VZ) Wireless, which uses a 10X10 nationwide channel in 700 MHz spectrum, plans to have two-thirds of the country covered with LTE by the time Sprint launches its LTE network.

Meanwhile, Sprint said it will not be providing funding for Clearwire (NAS: CLWR) , even though the company currently resells Clearwire's WiMAX service and holds a 54 percent stake in the firm. Clearwire wants to transition to a TDD-LTE network and has said it needs to raise between $150 million and $300 million for the maintenance of its existing WiMAX network and $600 million to begin deploying LTE-Advanced network technology.

Clearwire, as you can imagine, is not happy with Sprint's decision to deploy LTE. The company reiterated that its spectrum reserves are uniquely positioned to help Sprint and other carriers with 4G capacity issues. "Sprint remains dependent on Clearwire for 4G and nothing about today's announcement changes that," Clearwire said in a statement. "Even with their re-allocation of existing spectrum, it's obvious that their spectrum resources are insufficient to meet the long term demands of mobile data, but this is not unique to Sprint. Data capacity will clearly stress the capabilities of the low capacity 4G deployments of other carriers due to their spectrum constraints."

The more logical route for Sprint would be to forge a network-hosting deal with Clearwire, so that Clearwire could take advantage of the Network Vision architecture and Sprint could get access to Clearwire's 2.6 GHz spectrum. They could then develop devices that support both TDD LTE and FDD, which should be feasible by the middle of next year. Steve Elfman, Sprint's president of network operations and wholesale, said it will take a lot more than $600 million to get Clearwire's LTE network nationwide, and admittedly, Clearwire itself has said it will take a year to complete its LTE overlay. It's likely that there are financial and strategic reasons that are stopping this type of deal. 

Hovering over all of this is Sprint's impending launch of Apple's (NAS: AAPL) iPhone 4 and iPhone 4S, which every Sprint executive said they were thrilled about. Presumably, Sprint would like to offer an LTE iPhone next year and beyond. How will both the CDMA iPhones Sprint is launching later this week and future LTE iPhones affect Sprint's network and fit into this complex transition plan? 

As I said, I'm left with lots more questions than answers. Hopefully, all of this will become clearer in the weeks and months ahead. For Sprint's sake, I hope the company's executives have more answers than I do.

This article originally published here. Get your wireless industry briefing here.

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