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Posted at 10:35 AM ET, 03/ 9/2011

Will Sprint spell '4G' as 'LTE'? And will T-Mobile help with that rewrite?

By Rob Pegoraro

Sprint has some decisions to make this year.

First among them: The Overland Park, Kan., carrier needs to choose how it will employ the spectrum freed up by its planned retirement of its Nextel service. Should it stick with its current network architecture or use those frequencies to launch a new 4G service built on the LTE standard endorsed by competitors AT&T, Verizon Wireless and T-Mobile?

Sprint has its own 4G service, operating on a technology called WiMax. Adopting that standard allowed Sprint to launch a fourth-generation mobile-broadband service in October 2008, long before its rivals had their 4G offerings in the market. (Note that AT&T and T-Mobile's 4G services are really upgrades of their 3G networks.)

sprint_logo.jpg

WiMax--also used by Clearwire for its Clear Internet-access service--works in a wide variety of phones and modems, but in my tests it hasn't matched the speeds of Verizon's LTE service. It also suffers a more serious problem: Most of the industry is going with LTE, short for "Long Term Evolution."

And Sprint has been showing signs that it, too, may see more of a future in LTE.

Bob Azzi, Sprint's vice president for network issues, discussed the company's options in a phone interview last month.

It's not a question of dumping WiMax for LTE, he said, but of how to use the vacated Nextel spectrum. "It will always be a proposition of WiMax and something else," Azzi said. He said that 800 MHz band would work well for Sprint's current 3G CDMA service, while the 1900 MHz now occupied by CDMA could make a good home for LTE. But WiMax -- now provided on 2.5 MHz spectrum licensed by Clearwire -- isn't geared for those other two blocks, Azzi said.

(Clearwire, meanwhile, has been doing its own tests of LTE as a possible upgrade path.)

So Sprint could decide either to reuse Nextel's old airwaves for upgraded CDMA service or reshuffle its services to add LTE. Which way will it go? Azzi said "customers want the faster speed of WiMax"--and Sprint can't readily provide faster speeds on the spectrum it has licensed without going to LTE.

Sprint and Clearwire could add LTE to their cell sites without ripping out racks of existing hardware, but no such upgrade path exists for current WiMax phones. Azzi suggested that upcoming models will solve that issue by supporting WiMax, LTE and CDMA. In any case, this transition would take from three to five years to complete.

The carrier plans to announce its decision around the middle of the year.

Before then, it may come to a second decision: whether to merge with T-Mobile. Bloomberg BusinessWeek reporters Serena Saitto, Jacqueline Simmons and Jeffrey McCracken wrote yesterday that T-Mobile's corporate parent, Deutsche Telekom, is talking to Sprint about selling T-Mobile USA in return for a stake in the merged company.

A combination of Sprint and T-Mobile, with more spectrum at its disposal, might compete better with AT&T and Verizon. But it would still have to rely on those two firms and other land-based telecom firms for "special access" connections from cell sites upstream to the Internet. And it would have an even messier standards choice to make, since T-Mobile's 3G runs on the GSM standard used in most of the world.

The Wall Street Journal's Stephen Grocer quotes a handful of analysts who approve of consolidation but warn of complications. But their use of phrases such as "creating additional rationalization for the industry" and "the U.S. wireless industry remains plagued by an oversupply of carriers" suggests the obvious downside: less competition for each subscriber's credit card when only three companies sell nationwide wireless service.

I think an LTE migration makes enormous sense for Sprint: That's where the industry is heading, and if we can ever get all the carriers to adopt the same standard we will be a lot closer to keeping our phones when we change carriers. I'm not nearly as sure about the merits of yet another wireless merger. Sprint, having endured a long bout of indigestion after its Nextel merger, probably has similar doubts. How about you?

By Rob Pegoraro  | March 9, 2011; 10:35 AM ET
Categories:  Mobile, Sprint, T-Mobile, Telecom, Verizon  
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Comments

Sprint has made some solid moves forward the last couple of years in regards to customer service, pricing, network quality and phone selection.
But the new $10 data add on charge and the change in premier status (being able to upgrade every year) has POed a lot of customers.
If you have a family plan with four smartphones, that's an extra $480 a year. Ouch!
You daring your best customers to leave.
A merger with T-Mobile would put it in a better place to compete with VZW and ATT but they would have to go all LTE to get everyone on the same page.
Sprint knows it doesn't need another Nextel debacle, different networks.

Posted by: patchss | March 9, 2011 11:17 AM | Report abuse

As you say, it may take five years for all of this to 'shake out'; by then (2015) everyone will be on to 5G. But I agree that Sprint should merge with T-mobile and switch to LTE in that process. The sooner everyone gets on the same system, the sooner that technologies like near-field (phones as credit cards) can mature. In this we are years behind Asia and Europe. We need to lead; not follow. "Competition" is supposed to foster innovation and keep prices down. Sadly, it no longer does. We Americans need to choose the single best system and force it to evolve at an exponential rate. We should be able to have unlimited access at a flat rate. All this price-fixing and game playing is just slowing the evolution rate.

Posted by: KKMcK1 | March 9, 2011 3:19 PM | Report abuse

Interesting we are talking now of competition albeit with an LTE acronymic-caveat attached. LZW? AT&T?. Long term evolution is now dominated with once gently assuaged and regulated monopolies, i.e. AT&T to RBOC to NYNEX, et al to Verizon to cellular-ness to wireless-ness to AT&TVersizonLTE. Gosh we've come a long way from the days these clowns could shut of your telephone back at the billing office (nxx code) for not paying your yellow pages advertising bill!

Posted by: kdr409 | March 9, 2011 4:15 PM | Report abuse

I won't pretend to understand why Sprint must scrap WiMax and move to LTE since the portability of handsets is still just an illusive dream. What I think could make sense to Sprint, especially with a T-Mobile merge in the works, to pull a page out of the corporate IT SOP; simply skip one of the major technology upgrade wars! Win customers with good service and low prices. Then, carefully plan a unified roll out of some new future technology without the confusion created by constant system upgrades. Investors will appreciate a solid, conservative strategy like that, and customers will appreciate genuine efforts to keep prices lower for them.

Posted by: timhief | March 11, 2011 10:38 AM | Report abuse

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