Ever since Sprint (S) began bandying about the term 4G back in 2006, it’s been talking a big game about networks. It’s boasted about its significant spectrum holdings, its willingness to take the lead in new technologies, and its desire to overturn the established business models of mobile telecom.
But in those seven years, that promised game-changing network has failed to materialize. Sprint has been hobbled by financial troubles ever since it bought Nextel. And instead of building its own WiMAX network, it outsourced the task to Clearwire, which then found itself in worse financial shape than Sprint. Meanwhile, the vaunted global ecosystem Sprint hoped to build around WiMAX simply collapsed. AT&T (T) and Verizon Wireless (VZ) have long since passed it by in the 4G race.
But Sprint’s fortunes changed this week. On Wednesday, SoftBank closed its $21.6 billion [≈ net worth of Charles Koch, American businessman (2011)] investment in Sprint, picking up Clearwire as part of the package. SoftBank (9984:JP) has fronted Sprint $5 billion [≈ construction cost for Nimitz-class aircraft carrier] in capital, and SoftBank Chief Executive Officer and new Sprint Chairman Masayoshi Son has promised to invest billions more in the company. By taking over Clearwire, Sprint also gains direct control over more than 100 MHz of spectrum in major markets across the country.
So, Sprint, it’s time to build that network you’ve been promising.
Sprint now has the resources to create one of the most powerful, if not the most powerful, LTE networks in the country—one that would certainly put its current LTE efforts to shame. A small portion of its 2.5 GHz spectrum is currently being used in the old Clearwire WiMAX network, and some of that spectrum is in weird configurations, making it less useful for mobile broadband. But the companies still have a lot of airwaves to play with.
Before the acquisition, Clearwire was formulating plans for an LTE network that could support theoretical download speeds of 168 Mbps using just 40 MHz of its spectrum. Sprint could not only build such a network, it could build that same network capacity twice or possibly three times over as it optimizes its spectrum for mobile use and takes advantage of forthcoming LTE-Advanced technologies.
The key word here isn’t speed—though Sprint can certainly build a fast network—it’s capacity. With more capacity Sprint can support more mobile broadband connections and deliver that service at a much lower cost to the consumer.
Sprint has some disadvantages. The 2.5 GHz airwaves aren’t the ideal airwaves for a nationwide network because their high-frequency signals don’t travel as far as the lower frequencies that AT&T and Verizon use. Also, Sprint has to use a variant of LTE called Time Division-LTE (TD-LTE) that no other U.S. operator is using, making it harder to get devices that work on its network.
But Sprint and its partners are solving those problems. Sprint is using its old low-frequency Nextel spectrum to build a plain-old LTE network with lots of coverage. And while TD-LTE is rare in the U.S., it’s being adopted by key operators all over the world, including Sprint’s new parent SoftBank and the world’s largest carrier China Mobile (CHL). Sprint won’t get TD-LTE smartphones tomorrow, but it will get them.
Back when Sprint was laying out its WiMAX blueprint, then President of 4G Barry West laid out a very compelling vision for the mobile broadband. Here’s what I wrote in a profile of West at the time:
West suddenly introduced the idea of a “4G” to the wireless landscape—a moniker that still irks chief technology officers today. From Sprint’s pulpit, he not only preached mobility but predicted the dawning of a new type of mobile operator that shunned the key tenet of any wireless business model, the cell phone. Instead, the mobile order would be driven by data-centric and consumer electronics devices connected to a ubiquitous network. It would be a network that combined the most attractive elements of the wireline broadband and mobile industries. Instead of paying for a broadband line to a specific physical address or paying to connect a specific device to a [mobile network], West proposed broadband should be an ethereal service surrounding customers at all times that could be accessed via any electronic means.
In 2008, those ideas were pretty controversial in the mobile industry, and some of them remain controversial today, especially West’s calls to eliminate contracts and treat mobile data access as a mere commodity. But West is long gone (he’s now CEO of a Boston startup called Collision Communications, developing—of all things—LTE-Advanced technologies).
Sprint and Clearwire kept to some of those principles. Neither got rid of unlimited data plans entirely, and as CEO Dan Hesse has pointed out, much of how Sprint defines itself is by what AT&T and Verizon are not. But it’s safe to say Sprint has since toned down its mobile broadband ambitions.
I’d like to see Sprint amp those ambitions back up. We’re starting to see operators around the world (Free Mobile) and here in the U.S. (T-Mobile) challenge the established order of mobile telecom. I don’t want Sprint to just join their ranks. I want Hesse and company to spearhead the movement.
And Sprint can start by building one big monster of a network.
Also from GigaOM: