Sprint's 4G road to victory

When Sprint handed its 2.5 GHz spectrum and WiMAX assets to Clearwire in 2008, it was looking to mitigate its risk. By turning its 4G network over to Clearwire, Sprint would get the best of both worlds: a robust mobile broadband network putting its competitors’ 3G networks to shame, while sharing the cost of building it among multiple investors. But three years later, Sprint may be rethinking that decision.

According sources cited by Bloomberg, Sprint is exploring some combination of investment between itself and Clearwire’s cable investors that would fund Clearwire’s LTE plans and possibly put see Sprint take over its 4G partner. The latter scenrio is definitely the most interesting. While ponying up $600 million for Clearwire’s LTE build would set the struggling operator back on track, it would do little to give Sprint the nationwide 4G network it needs.

Sprint has discovered that not having direct control over its own 4G network and strategy isn’t the best of ideas, especially in the current highly competitive mobile broadband market. At first, Clearwire had numerous advantages stacked in its favor. With WiMAX it had a time-to-market lead over all of its competitors, and with 100 MHz-plus of spectrum in all markets there was virtually no ceiling to the capacity Clearwire could build. But Clearwire got off to slow start, building its network in only a handful of major markets in 2009. In 2010, Clearwire ramped up its deployment, covering more than 120 pops, but in 2011 its expansion practically came to a halt as it ran out of funds.

Meanwhile, Clearwire’s shrinking time-to-market advantage was cut down even further as Verizon Wireless bit the bullet and decided to deploy long-term evolution (LTE) networks much earlier than other global operators. T-Mobile and AT&T started upgrading their 3G and backhaul networks to support high-speed packet access plus (HSPA+), which brought their broadband speeds within shouting distance of Sprint’s WiMAX service. And they started calling those networks 4G. Instead of having several years of smooth sailing as the only 4G providers, Clearwire and Sprint find themselves in a market with five operators claiming to run 4G networks.

What’s worse is their network is among the smallest of that bunch even though it was the first network to launch. Compared to Clearwire’s 136 million pops, VZW now covers more than  160 million people with LTE, T-Mobile has 200 million under its HSPA+ umbrella and though AT&T hasn’t revealed any coverage figures, its HSPA+ network and backhaul networks are quickly encompassing all of the major U.S. markets. Even regional operator MetroPCS plans to have 146 million pops covered by early 2012 (CP: Connected Planet’s ‘4G Scorecard
If Sprint wants to revive its 4G strategy, it needs to invest directly in its mobile broadband networks. The relationships its built with Clearwire and LightSquared (CP: Sprint confirms LightSquared tie-up) just won’t cut it. LightSquared’s plans are far from certain given regulatory pressures (CP: Sorting out the LightSquared interference mess), and Clearwire’s LTE plans are far too limited—and remain unfunded—to give Sprint the nationwide LTE network it needs (CP: As the 4G road forks, Clearwire chooses both paths).

That Sprint might be negotiating a purchase of Clearwire is no surprise. The big surprise is it waited this long to do it.


Source: connectedplanetonline.com