What constitutes a wireless carrier?
Years ago, I used to have an annual fight with an MCI spokesman because RCR Wireless News listed MCI as the nation’s largest reseller in our Top 20 lists. Who wouldn’t want to be No. 1, you ask? MCI did not want to be referred to as a reseller at all; it believed it was a carrier because it had its own “network” (MCI’s term, not mine). However, MCI owned no spectrum. It resold service using wireless operators’ spectrum so it fell under the domain of reseller, according to my definition of what made one service provider a reseller and another a carrier. In the end, it all comes down to spectrum. (And MCI was acquired by WorldCom, which declared bankruptcy, stopped reselling wireless service and was recently acquired by Verizon. I win.)
Nevertheless, the new Sprint Nextel Corp. could put some cracks into my rock-solid definition that a carrier is the company that owns the spectrum. Sprint Nextel made good on its deal to allow cable companies onto its network to resell wireless services. But it’s not a traditional resale pact and it’s not an MVNO deal. It’s a joint venture. And it’s something new. Sprint gets to keep the money from the wireless portion of the sale, but the cable companies will contribute to marketing and will do their own billing, etc.
Sprint Nextel also said in its far-reaching announcement that it plans to work with the cable consortium to develop next-generation services using its substantial 2.5 GHz spectrum holdings. The goal is to further integrate wireline and wireless services.
WiMAX proponents, who believe the standard one day will be the portable Internet, covet the 2.5 GHz band. And since WiMAX spectrum in the United States is lacking today, a good number of people at last month’s WiMAX World conference said they think Sprint will resell some of its 2.5 GHz spectrum. It may be wishful thinking or it may be a really good way for Sprint to make some money on spectrum it owns. Either way, new service providers could offer wireless services using Sprint’s network.
Sprint already has extensive MVNO agreements. Could there be a point when Sprint does more business as a carrier’s carrier or a wholesaler, rather than as a traditional wireless operator?
Sprint, meanwhile, wants to be referred to as a multimedia company, which is not exactly a wholesaler or a telecom carrier.
