Do Not Rule Out LTE for Sprint

Implications: 1.      Sprint is likely to follow its biggest CDMA rival – in the end, moving to LTE. 2.      It was never Sprint’s intention to use its 4G network as a replacement for the 3G.   3.      3G networks still have plenty of legs.  

Analysis:  In the past, Sprint expressed reservations about 1xRTT.  Yet, after Verizon launched some of this technology, Sprint was the first to deploy 1xRTT nationally.  Then there was a time when Verizon was pushing EV-DO while Sprint was enamored with EV-DV.  Eventually Sprint’s later aggressive deployment of EV-DO spoke for itself.  

Now we have a situation in which Verizon wants to go in an LTE direction as Sprint is moving towards WiMAX.  While there has been somewhat of a pullback on the WiMAX technology schedule, there is no evidence to suggest that Sprint has scaled back at all on its overall direction for the technology – especially with a potential deal with Clearwire and with the expectation of additional funding.  There is certainly the belief by Sprint executives that it has as much as a three-year head start over LTE, a protocol that is essentially vaporware right now.   

The key point is that the deployment of WiMAX and the later possible move to LTE are not mutually exclusive.  Sprint’s WiMAX network is a completely separate, data-oriented, high-bandwidth alternative.  Despite any hype out of Sprint to the contrary, the carrier will probably follow Verizon, the leading mover and shaker in CDMA, and go to LTE on its PCS network.  Compliance on a single standard throughout the world, especially for people traveling on business will be very compelling.  In addition, the supposedly low amount of additional infrastructure that will be required is appealing.  

The big question is just how far the WiMAX effort will go.  While WiMAX has the backing of Intel and chips will be built into laptops shortly, Sprint is going to be worse off than Clearwire in terms of competition.  Most of Sprint’s licenses are for the big cities with ample competition from cable and DSL providers.  Also, although Sprint acknowledges the need for two to three times as many towers as the CDMA network, it is not out of the question it will be closer to five times as many towers – the requirement of tens of thousands is a distinct possibility.  And as has been pointed out in previous articles, with further revisions on EV-DO leading to higher capacity, WiMAX will increasingly become a competing service.  

It should be noted once DO was first rolled out, Sprint was planning on how it was going to deal with all of the huge bandwidth that it was expecting.  As it turned out, it does not drive that much more data.  One can surmise that many people are essentially using the computer in the same way as they did with previous generations of technology – download their email and read them.  Thus, there are these bigger, faster bursts, and then longer gaps, but not really new applications.   

While huge increases in speed are always nice, the outcome with DO raises doubts about the ability of WiMAX to drive new applications, especially while in motion.  Arguably younger folks would be downloading more music and movies.  However, one wonders just to what extent people will take advantage of chips in their ovens and in their cameras.  It is also hard to imagine that all of a sudden, wireless cards will be plugged into servers and hosting websites.   

There is little doubt that cable or DSL can sometimes be hard to get even around the city of Sprint’s headquarters, Kansas City.  Wireless can be the only lifeline and extra bandwidth would allow the support of multiple computers on the same uplink – but it should be realized that EV-DO Rev B could be sufficient for this purpose.