To the surprise of few, Sprint Nextel Corp. officially threw its hat into the LTE ring this morning, announcing details of its planned Network Vision upgrade that will see the carrier begin offering LTE-based services by the middle of next year.
The carrier announced that its plans to begin deploying LTE services using its G-Band 1.9 GHz spectrum is already underway with work on approximately 22,000 cell sites and that it expects to offer “4G” services from a mix of LTE and WiMAX to 176 million potential customers by the end of next year and 250 million pops by the end of 2013. The 2012 estimates include 123 million pops covered with LTE and 120 million covered with WiMAX from its partnership with Clearwire Corp., with approximately 67 million pops covered by both technologies.
By the end of 2013, Sprint Nextel expects its LTE network to encompass 250 millon pops, including all of its current WiMAX coverage.
As previously announced, Sprint Nextel is working with Ericsson, Alcatel-Lucent and Samsung Telecommunications Americas on building out the Network Vision initiative. Ericsson is in charge of equipment across most of the Southeast; Alcatel-Lucent the East Coast, Southwest and Hawaii; and Samsung portions of the Midwest, Northwest and Puerto Rico. A previous agreement sees Ericsson handling all network management.
The initial deployment will rely on the 10 megahertz of G-Block spectrum in the 1.9 GHz band Sprint Nextel acquired as part of its 800 MHz re-banding efforts, with plans to refarm additional 1.9 GHz spectrum when possible. That refarming will rely somewhat on Sprint Nextel’s plans to begin deploying CDMA services in its now contiguous 800 MHz band that will be possible with the phasing out of its iDEN network over the next several years.
Sprint Nextel noted that its current spectrum assets would be enough to support expected traffic through the end of 2014, with an additional year being squeezed out if its pending spectrum hosting deal with LightSquared moves forward. That deal is pending LightSquared’s ability to clear up its current GPS interference issues with its 1.6 GHz spectrum holdings. Sprint Nextel does have the ability to cancel the hosting agreement if that issue is not settled by the end of the year, though by viewing how integrated LightSquared was in Sprint Nextel’s presentation it would seem that Sprint Nextel is willing to give LightSquared some room to move on this.
One item Sprint Nextel did make clear was that it was not at this time interested in providing any financial assistance to LightSquared, which is still scurrying to secure sufficient funding for its network plans.
In support of the LTE build, Sprint Nextel said it expects to have 15 devices available around mid-2012 across multiple segments, including smartphones, tablets and wireless modems. The carrier said it plans to limit multi-mode CDMA/LTE/WiMAX devices to mobile hot spot devices.
Also on the device front, Sprint Nextel made a point to highlight the positive benefits its ability to begin selling Apple Inc.’s iPhone will have on the carrier. While acknowledging the need for additional device subsidies, the carrier noted that the increased customer retention the device provides will lead to an increase in long-term customer value for the carrier. Sprint Nextel added that the most common complaint from customers leaving the carrier was the lack of iPhone offering.
As for its current WiMAX services, Sprint Nextel said it remains committed to selling devices through the end of 2012, which is inline with its announcement earlier this year to purchase $1 billion worth of wholesale services from Clearwire through the end of next year. Clearwire has said it plans to stop expanding its current WiMAX footprint, which stands at just under 130 million pops, and if it can secure additional funding will use its resources going forward on the deployment of LTE TDD services using its vast 2.5 GHz spectrum holdings.
The Clearwire question was a hot topic for those in attendance at the Sprint Nextel event, with many institutional investors hedging that Clearwire could move towards bankruptcy in the next 12 to 18 months unless it can secure additional funding. Sprint Nextel, for its part, did not go out of its way to reassure those investors noting that they would have to talk with Clearwire for any future guidance and by not including Clearwire as a core tenant of its Network Vision plans.
Looking to head off some of that potential negative perception, Clearwire sent out a statement regarding its current relationship with Sprint Nextel.
“As the largest wholesaler of 4G capacity, with unmatched spectrum, Clearwire is uniquely positioned to offer capacity to Sprint, and other carriers, particularly in urban areas where demand is high and their 4G spectrum will be inadequate. Sprint remains dependent on Clearwire for 4G and nothing about today’s announcement changes that. 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.
“We are also working globally with other members of the Global TDD-LTE Initiative (GTI), including China Mobile, to develop a low-cost, highly scalable device ecosystem that will work across various LTE networks and frequencies. As demand for mobile data increases, Clearwire remains the only viable 4G wholesaler with an operating 4G network, substantial spectrum resources, and a global technology road map to serve this growing market.”
Investors did not seem reassured as Clearwire’s stock plunged more than 30% in early Friday trading to a new 52-week low of $1.32 per share.
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