Light Reading

Sprint: 4G & M&A Still Unclear

Raymond McConville
LR Mobile News Analysis
Raymond McConville
5/7/2008
50%
50%

At last we finally have a clear picture of where Sprint Corp. (NYSE: S) stands with WiMax. (See Sprint, Clearwire Create $14.5B WiMax Giant.) But what the service provider plans to do with its own cellular network and its own M&A strategy going forward remains unclear.

The issue at hand is that Sprint now has 50 million subscribers set to potentially migrate to WiMax services. But the company will only have 51 percent ownership over any customer that makes that migration, as opposed to a 100 percent ownership that it would have over a customer on any 4G network it potentially built on its own.

Sprint CEO Dan Hesse addressed the issue on a conference call this morning saying: “It [the new Clearwire] provides lift to our 3G products because we will be able to go to market uniquely with not only our capabilities under 2G and 3G, but we’ll be the only company also offering in available markets a 4G offer.”

Aside from getting to market sooner with the new Clearwire LLC (Nasdaq: CLWR) venture, Hesse added that “because of being an early investor, we feel the economics of this company to Sprint will be very favorable. It will allow us to bring these 4G products to market without the capex investment required if we were to build the network on our own.”

Hesse did not address directly whether this eliminated the possibility of Sprint building out 4G on its own at the later date, but it may not have the resources to do so anyway. The spectrum Sprint owns, with which it is building out so-called "4G" WiMax services, is 2.5 GHz spectrum. That will be the bandwidth hogged by the new Clearwire. And because Sprint did not bid in the recent 700 MHz spectrum auctions, it may not have any remaining spectrum to build out 4G with. (See Verizon & AT&T Win 700 MHz Sweeps.)

Unless Sprint plans on acquiring additional spectrum assets, its 4G eggs are all going into the new Clearwire basket.

Hesse also did not rule out whether the Clearwire deal would preclude other possible M&A activity while the new company goes through the approval process. “I’m not aware that it would preclude any other options that Sprint may or may not consider,” said Hesse. Among those rumored options lately are a potential acquisition bid from German incumbent carrier Deutsche Telekom AG (NYSE: DT). (See DT & Sprint: A Bargain in the Balance?)

While rivals AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) have enjoyed strong growth with their wireless services, Sprint has struggled while losing both market share and subscribers. While it now has roughly a two-year head start on the competition with 4G, the Clearwire deal is not signed, sealed, and delivered and won’t be until the fourth quarter of this year. Sprint can’t afford to fall behind by seven months if the deal falls to get approval before then.

But in the meantime it now has gained Mobile Virtual Network Operator (MVNO) agreements with the two biggest cable MSOs Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC), who are starving to add quad play to their arsenals. And teaming up for some exclusive collaborative efforts with one of the most feared companies on earth, Google (Nasdaq: GOOG), shouldn’t hurt either.

Shares of Sprint are up $0.32 (3.48%) to $9.51 in early morning trading.

— Raymond McConville, Reporter, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
Between the CEOs
Affirmed Networks CEO: Digging Into NFV

5|28|15   |   40:26   |   (0) comments


Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
LRTV Documentaries
Cable Eyeing SDN for Headend, Home Uses

5|26|15   |   05:57   |   (1) comment


CableLabs is looking at virtualizing CMTS and CCAP devices in the headend, as well as in-home devices, says CableLabs' Karthik Sundaresan.
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Procera has gathered facts, stats and customer experience feedback from a survey of 540 users from across the globe.
Hot Topics
10 Alternate Uses for Tablets
Eryn Leavens, Copy Desk Editor, 5/22/2015
Bidding War for TWC Looks Likelier
Alan Breznick, Cable/Video Practice Leader, 5/22/2015
Charter Seals Deals for TWC, Bright House
Mari Silbey, Senior Editor, Cable/Video, 5/26/2015
Eurobites: Alcatel-Lucent Trials 400G in Czech Republic
Paul Rainford, Assistant Editor, Europe, 5/26/2015
Potholes Lurk in Indian Smart City Project
Gagandeep Kaur, Contributing Editor, 5/22/2015
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
On May 29th 10 AM ET, Steve Saunders, founder and CEO of Light Reading, will be drilling into the "pains and gains" of NFV with Saar Gillai, SVP & GM for NFV at Hewlett-Packard Co. (NYSE: HPQ) (HP). He has defined a four-step NFV model describing a sequence of technology innovation. It's a must-read doc for any network architect looking to get to grips with their NFV migration strategy. Join us for the interview, and the chance to ask Saar your NFV questions directly!
Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
With 200 customers in 60 countries, Stockholm-based Net Insight has carved out a solid leadership position in one of the hottest vertical markets going in comms right now: helping service providers and broadcasters deliver video and other multimedia traffic over IP networks. How has Net Insight managed to achieve this success in the face of immense competition from the industry giants?
Cats with Phones