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4G World: Sprint and Clearwire’s reconciliation primarily symbolic


26/10/2011

More on this Topic Industry News Blogs Briefing Room

The technical agreement with Clearwire that Sprint announced today at its Q3 earnings doesn’t change much. (CP: Sprint defends iPhone decision, will need up to $7 billion in financing help) Clearwire`s proposed time division-LTE network is still in limbo without funding, and Sprint isn’t forking over any more cash. Sprint hasn’t committed to buying future TD-LTE capacity or expanding its current WiMAX contract. The memorandum of understanding to jointly develop a TD-LTE ecosystem isn’t even binding. But what the agreement lacks in weight it makes up for in symbolic value.

Three weeks ago Sprint and Clearwire appeared to be on the verge of dissolving their wholesale relationship—a situation made all the more odd by the fact Sprint is Clearwire’s majority shareholder (CP: Sprint strikes out on its own with LTE). In announcing its plans to pursue LTE over its own PCS spectrum, Sprint made no mention of Clearwire in its future plans beyond its wholesale WiMAX capacity commitment through 2012 and seemed poised to walk away from Clearwire and its enormous spectrum holdings once it moved its current 4G customers over to LTE in 2013.

Today CEO Dan Hesse said that was all a misperception—Clearwire and Sprints’ engineers hadn’t hashed out the details of their joint LTE strategy by the time of its Oct. 7 analyst conference. But Sprint’s public posture at the conference was very clear: It was prepared to pursue a 4G future that either didn’t include Clearwire or greatly minimized it (CP: A Tale of Two Sprints: Can Sprint really go it alone?).

While the memorandum is non-binding, Hesse pointed out it was a first and necessary step toward signing a commercial agreement for Sprint to buy TD-LTE capacity. Still, Sprint isn’t exactly making TD-LTE its core 4G strategy. At his keynote at 4G World today, Sprint Senior Vice President of Network Bob Azzi outlined a new strategy that included TD-LTE, but those plans still relegated Clearwire to the bottom of its 4G connectivity priority list.

Azzi said Sprint would focus foremost on its own LTE network to build mobile broadband capacity, building carriers at PCS and eventually 800 MHz as it phased out its iDEN network. Sprint would then supplement that capacity through its Network Vision hosting partnerships, Azzi said. LightSquared is the first of what could be several network-sharing deals. Assuming LightSquared gets FCC approval to launch its network, Sprint could start adding LTE capacity at 1.6 GHz next year. Finally Sprint would tap into Clearwire’s TD-LTE network at 2.5 GHz as a high-capacity overlay in urban areas, which fits in Clearwire’s announced plans to build LTE only at its highest-traffic cell sites.

“At 2.5 GHz, we’re really taking advantage of the depth of that spectrum,” Azzi said. “We see it being a primary offload layer in the hottest of hotspots.”

Azzi also offered assurances that Sprint wouldn’t simply abandon WiMAX when its LTE network went live. He said that 20% of all of Sprint’s mobile data traffic today ran over WiMAX. Those numbers would only increase as Sprint plans to continue selling WIMAX devices through 2012. Depending on the status of its LTE network, Azzi said, Sprint could continue activating WiMAX devices well into 2013 and would definitely maintain its WiMAX wholesale agreement long thereafter to support its customer base of millions of legacy WiMAX customers.

Sprint, however, would face several challenges implementing every component of that strategy. Sprint doesn’t plan to bridge the WiMAX and LTE networks with dual-mode smartphones--though it does plan to offer dual-mode modems and hotspots—but if it does go forward with TD-LTE it will have to secure devices that work not only in the PCS and 2.5 GHz frequencies but contain both frequency division and time division duplexing LTE radios. If LightSquared becomes part of the equation, then Sprint will also need to add support for the 1.6 GHz frequencies. The resulting devices could have as many as four radio bands and three separate radio technologies.

Clearwire is working with China Mobile and other international operators to build a TD-LTE ecosystem (CP: Can Clearwire build a TD-LTE ecosystem), and its Clearwire’s hope that the technology will gain such global traction that chipmakers will make TD-LTE a standard component of every LTE chipset (CP: CTO explains Clearwire’s unique flavor of LTE). Sprint’s name definitely adds weigh to that ecosystem initiative, but Sprint and Clearwire also tried to build a similar ecosystem around WiMAX, and failed. TD-LTE may have more working in its favor though. The other worldwide backers of TD-LTE tend to be established wireless carriers rather than the upstart mobile broadband ISPs that backed WiMAX.

But even if that ecosystem development is only a partial success, Sprint could reap plenty of benefit. If dual-mode TD-FD-LTE smartphones don’t emerge, Sprint should have little trouble procuring dual-mode hotspots and modems, which place the biggest data burdens on the network. Sprint could use the Clearwire TD-LTE network as a mobile broadband access overlay taking all laptop and mobile computer traffic off of its core LTE network at PCS in the most heavily utilized areas. Sprint then could reserve the PCS network in those areas solely for smartphones and tablets.



 

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