Craig Moffett of Bernstein Research laid out a nightmare vision in which "some combination" of the mobile carrier's $15.5 billion multiyear iPhone contract with Apple (NAS: AAPL) , "a hobbled 4G offering, and a stupendous debt burden," exacerbated by Apple introducing a 4G LTE-capable version of the iPhone before Sprint's own LTE network is operational, makes the possibility of bankruptcy "a very legitimate risk."
Just hold on a minute
Not so, said Sprint CFO Joe Euteneuer. "We will not be disadvantaged," he said, referring to the rumors that Sprint would not get the LTE iPhone when Verizon (NYS: VZ) and AT&T (NYS: T) did. He said at a Barclays Capital investors' conference this week that Sprint had the same contract with Apple as both Verizon and AT&T.
More to Moffett's point, Euteneuer said that if Apple does launch its next phone in the fall of this year, the same time of year that Apple launched its iPhone 4S (refusing to say whether or not the next phone would be LTE-capable), Sprint would, by then, have its LTE network up and running and able to cover between 100 million and 120 million people in all of the major U.S. markets.
"If you make the assumption that they launch a device at a similar time that they did last year, [Sprint is] basically done with the [4G LTE buildout in the] major markets," he said. However, Sprint's plans include only having its LTE network available in six markets at the time of that network's anticipated launch this summer.
When it comes to spectrum, Euteneuer told the Barclays audience that Clearwire (NAS: CLWR) will be able to provide enough to meet Sprint's needs for the next four years. He also said that the speed of Sprint's LTE network will be equal to the speeds from Verizon and AT&T even though his company has less spectrum than the two giants. "The speed will be comparable because they are double our size," he said. (I added the emphasis.) He explained that seeming contradiction by adding that more subscribers means a need for more spectrum.
The 4G LTE iElephant in the room
Euteneuer did make a good attempt at quelling the groundswell of nervousness over Sprint's future. But his favorable spin couldn't completely push aside the realization that since Apple rolled out its 4G LTE iPad earlier this month, a 4G LTE iPhone can't be that far behind.
Apple obviously has a huge influence on the telecom industry with its iPhone and iPad, but investors shouldn't overlook those companies that supply the chipsets and the other piece of essential hardware that all the mobile device makers need to produce their devices. For an inside look at three such companies that The Motley Fool's analysts think are good bets, get this special report. It's free!
At the time thisarticle was published Fool contributorDan Radovskyowns shares of AT&T. The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.