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Sprint strikes out on its own with LTE


Sprint today revealed it is radically altering its 4G business model, announcing not only that it would launch an LTE network of its own in 2012 but that it is backing away from, if not abandoning completely, its wholesale relationship with Clearwire. The move puts Sprint firmly in control of its own mobile broadband destiny, but it also severely hampers its ability to grow its 4G services in the future. In a single stroke, Sprint turned one of the most powerful spectrum positions in the industry into one of the weakest.

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Sprint will deploy LTE initially over its PCS spectrum, which today is devoted to its CDMA 1X and EV-DO networks. It plans to launch its first LTE markets in mid-2012 over the new Network Vision base stations being deployed by vendors Ericsson, Alcatel-Lucent and Samsung. It plans to roll the network out rapidly covering 250 million pops by the end of 2013. Sprint will continue to offer WiMAX devices through 2012, but in 2013 plans to shift its focus to its own LTE service and de-prioritize any wholesale capacity agreements. Clearwire plans to build a time-division-LTE (TD-LTE) network—if it can secure additional funding (CP: As the 4G road forks, Clearwire takes both paths)—but Sprint apparently wants no part of it.

However, to get an LTE network of adequate size, Sprint will have to shut down a good deal of its 2G voice and 3G data networks. It doesn’t hold any free-and-clear blocks of spectrum like the 700 MHz or Advanced Wireless Service (AWS) blocks held by AT&T and Verizon Wireless. As CDMA is deployed in 1.25 MHz carriers, Sprint can incrementally phase out 2G and 3G as it expands LTE. But if it hopes to match the LTE networks launched by Verizon and AT&T, it would have to shut down more than half of its CDMA carriers. Nationwide Sprint owns about 35 MHz of PCS spectrum. A robust LTE network would require it to use 20 MHz of that spectrum.

Sprint has 800 MHz spectrum currently occupied by iDEN, which Sprint plans to start phasing out this year. It plans to move CDMA and eventually LTE into that spectrum, but overall its spectrum position is severely reduced without Clearwire’s assets. While Clearwire’s high frequency 2.5 GHz spectrum is less desirable than the 700 MHz used by AT&T and Verizon, and its WiMAX and planned TD-LTE networks don’t line up with the dominant global standards (CP: Can Clearwire build a TD-LTE ecosystem?), what Clearwire lacks in quality it makes up for in quantity. It has 100 MHz-plus of spectrum in all markets with more than 130 MHz in many major markets.

Without Clearwire’s spectrum, Sprint is left with just over 50 MHz of spectrum averaged over all U.S. markets. That’s roughly equivalent to the holdings of T-Mobile, which has readily acknowledged it doesn’t own enough frequencies to launch an LTE network of its own. While T-Mobile has discussed the possibility of re-farming some of its PCS spectrum for LTE in the future, its primary strategy to get LTE was to merge with AT&T.

But Sprint president of network operations and wholesale Steve Elfman claimed Sprint’s spectrum position is strong enough to fuel its LTE service through 2014. If LightSquared gets approval to build its terrestrial LTE network, which Sprint would host on its Network Vision architecture (CP: Sprint confirms LightSquared tie-up), then Sprint would get access to more LTE capacity that would carry it through 2015. After that, Sprint would look for additional hosting deals or new spectrum to fuel its future 4G expansion, Elfman said.


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