Can Sprint Bring Back Subscribers With Wireless Google Fiber?
Sprint unveiled Spark on Wednesday, its new, wireless technology that will allow it to deliver Internet speeds at up to 1 Gbps -- as fast as Google Fiber. Sprint, despite returning to profitability, has continued to bleed subscribers, as rivals T-Mobile and Verizon have added them.
Unlimited data at blazing fast speeds
Initially, Sprint Spark won't offer speeds anywhere near Google Fiber; the search giant's much-hyped fiber Internet offering gives subscribers download speeds of 1 Gbps, and Sprint Spark will initially max out at 50-60 mpbs. Regardless, that's still fast relatively speaking (the average US broadband connection speed is around 9 mpbs) and Sprint has said that it will improve Spark over time. In theory, Sprint's technology is capable of offering speeds as fast as 2 Gbps.
Still, Sprint's offering will be quite limited, both in handsets and availability. Only three phones will work with Sprint's technology, and Apple's iPhone isn't one of them. At the same time, Sprint Spark is only available in five cities, though Sprint claims it will have Spark in 100 cities within three years.
Sprint's subscribers are leaving for other carriers
But will Sprint's subscribers wait around long enough to take advantage of Spark? On Wednesday, Sprint reported that it lost 360,000 contract subscribers -- better than some analysts had expected, but continuing an unfortunate trend; Sprint shed over a million subscribers in the prior quarter.
And while Sprint is losing contracts, other carriers are gaining them. When Verizon reported earnings in mid-October, America's largest carrier added just a little less than one million subscribers. Verizon's gain disappointed analysts, who were looking for over a million additions. Verizon blamed an inadequate supply of Apple's iPhone 5s, calling the lack of the popular handset a "significant issue."
Verizon's service is more expensive than Sprint's, but it offers better coverage in more markets -- Verizon offers fast LTE in more than 500 markets, Sprint in just 230. Verizon no longer offers unlimited data, unlike Sprint, but how is good is unlimited data if you can't access it?
Unlike Verizon, T-Mobile's network is not notably better than Sprint's -- its LTE covers just 233 markets. But it could outpace Verizon when it reports earnings next week.
Since its IPO in May, T-Mobile has been aggressive in unveiling innovative, new programs. First it was "Jump" back in July, a program to allow subscribers to upgrade their handsets twice a year. Next month, it will be free tablet data -- T-Mobile will give 200MB a month to anyone who owns a compatible tablet. These programs appear to be working -- in August, T-Mobile said it added 688,000 post-paid subscribers.
Bringing back the Spark
Analysts at Credit Suisse initiated Sprint back in September with an Underperform rating, warning that the carrier would have to reduce its margins in an effort to recapture subscribers from other carriers, including Verizon and T-Mobile. Spark could do that, but for suffering Sprint subscribers, it's yet empty promise.
In 2008, Sprint spoke of covering half the nation with WiMax by 2010. When 2010 rolled around, that was scrapped in favor of LTE. Sprint said it was hoping to have its entire LTE network built out by the end of 2013 -- but with just two months left, Sprint is nowhere near that.
Now Sprint is on to Spark -- perhaps this time will be different. But subscribers and investors shouldn't get their hopes up.
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The article Can Sprint Bring Back Subscribers With Wireless Google Fiber? originally appeared on Fool.com.Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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