Tuesday, October 11, 2011

Sprint shuns Clearwire with muddled 4G LTE network vision

Sprint Nextel held a 4G Strategy/Network Update meeting in New York City on Friday, October 7th. As has been anticipated for several months, in the meeting Sprint executives announced their plans for a "aggressive" rollout of LTE - a departure from their current 4G WiMAX strategy. This represents a strategic change of direction for Sprint, whose 4G strategy has up until now been based on joint development of a WiMAX network with Clearwire. Sprint remains the majority shareholder of Clearwire, with a 53.9% share as of the end of 2010. However, the relationship between the two companies has become contentious, in what Clearwire refers to as "pricing disputes with Sprint relating to 4G usage". In the update meeting, Sprint attempted to distance themselves from Clearwire, evasively referring to Clearwire only as a "wholesale" supplier for WiMAX.

While Clearwire is working to convert their network for TD-LTE, Sprint has chosen to pursue a different strategy for their LTE migration. Sprint intends to re-purpose much of their existing spectrum holdings for LTE, and to collaborate with LightSquared for additional LTE capacity. In the October 7th meeting, Steve Elfman, President of Network Operations and Wholesale at Sprint, said that the company would begin adding LTE to its existing 1.9GHz CDMA network in mid-2012, with targeted completion at the end of 2013.  Sprint will also look to add LTE in LightSquared's proposed 1.6GHz LTE spectrum, if that meets FCC approval, for deployment by the end of 2015. Ellfman also said that Sprint's LTE coverage will "hopefully" include the re-purposing of 800 MHz spectrum, which previously made up the Nextel iDEN push-to-talk network.

Much of Sprint's network update concerned their "Network Vision", a plan to implement multi-mode base-stations which the company announced last December. Sprint says that the multi-mode base stations will lower their costs of operating multiple networks, which currently represents a competitive disadvantage compared to the other U.S. operators. However, the company did not address what impact a multi-mode LTE strategy will have on end-user devices, which will presumably need to support as many as three different frequency bands: 1.9GHz, 1.6GHz, and 800 MHz. Sprint spoke only to the issue of multi-mode devices that will support 3G CDMA with WiMAX and/or 1.9GHz LTE. Sprint is looking to Qualcomm to supply 3G/4G multi-mode chipsets for dual-mode CDMA/LTE handsets, which the company expects to launch in mid-2012.

Sprint admitted that their 1.9GHz spectrum does not provide a sufficient footprint for the LTE coverage that they seek, while Clearwire has long claimed an advantage in their average of 150MHz spectrum holdings in the 2.5GHz band. Sprint's Bob Azzi, Senior VP of Networks who presented during the LTE update, had spoken of this advantage just a little over one year ago - during a 4G WiMAX Developer's Symposium that Sprint and Clearwire hosted at Stanford University.

Sprint could have pursued a strategy to continue leveraging the Clearwire spectrum advantage, by developing dual mode WiMAX/TD-LTE devices, as Sequans is doing with Malaysia-based WiMAX solutions provider Greenpacket. Sprint CEO Dan Hesse had previously declared 2010 as the "Year of 4G". By pursuing this new strategy, he is apparently willing to change that to 2013, totally giving up whatever first-mover advantage the company may have had before Verizon Wireless embarked on their own aggressive rollout of LTE.

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