& cplSiteName &

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
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Shades of Ray
Why Analytics Is the Tech World's Digital Glue

3|27|17   |   02:20   |   (0) comments


It was obvious at the massive annual CeBIT enterprise tech trade show that the foundation for tech innovation right now is real-time analytics.
LRTV Custom TV
CommScope – Meeting the Demands of Tomorrow's Networks

3|24|17   |     |   (0) comments


Phil Sorksy, Vice President International at CommScope, discusses addressing the challenges faced by service providers today, and as future trends emerge.
LRTV Huawei Video Resource Center
AMS-IX & Huawei's OSN 902

3|24|17   |     |   (0) comments


Huawei shows how its OSN 902 platform helps the Amsterdam Internet exchange to connect the world using multiplexing.
LRTV Huawei Video Resource Center
Huawei's Smart Energy Innovation Center

3|24|17   |     |   (0) comments


In Nuremberg, Huawei showcases its latest capabilities in the digitalization of Internet resources, network infrastructure and intelligence at its Smart Energy Innovation Center.
Valley Wonk
OFC & Hyperscale: A Good Mix?

3|24|17   |   01:50   |   (0) comments


Cloud and telecom players want different types of equipment for their networks, as the chatter at OFC reveals.
LRTV Custom TV
Etisalat on NFV Journey

3|24|17   |   10:37   |   (0) comments


Etisalat is a service provider that prides itself on bringing innovative technologies to the markets it serves. It was one of the first operators to implement 3G and leads the pack in fiber penetration. Now, Esmaeel Al Hammadi, Etisalat's SVP of Network Development, explains the operator's journey to virtualization, beginning with the network core, as well as the ...
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 3

3|22|17   |     |   (0) comments


Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting on the application of technologies and key business verticals such as transportation, smart city, manufacturing, media and finance.
LRTV Documentaries
No Regrets: Cox's Finkelstein on Fiber & More

3|22|17   |     |   (0) comments


At the Cable Next-Gen Technologies & Strategies event in Denver, Cox's Jeff Finkelstein examines the cable capex conundrum.
LRTV Documentaries
Cable Next-Gen: The 'Mile High' View From Denver

3|22|17   |   11:56   |   (0) comments


Alan Breznick kicks off the Cable Next-Gen Technologies & Strategies event in Denver, casting his thousand-yard stare over cable's current competitive landscape.
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 2

3|21|17   |   2:27   |   (0) comments


Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting digital transformation solutions around IoT, smart data centers, OpenCloud ecosystem and its newly announced storage-as-a-service solution.
LRTV Custom TV
Driving Better Mobile Customer Experience While Transforming the Mobile Network

3|21|17   |   7:47   |   (0) comments


Light Reading talked to George McGregor of Citrix about the NetScaler Mobile Gateway - an intelligent traffic management solution which can markedly improve the customer experience provided by mobile operators, even when traffic is encrypted. Critical network services can be consolidated and virtualized using NetScaler. Because of the unique architecture, ...
LRTV Custom TV
Mastercard: What's Next for Mobile Payments?

3|21|17   |   7:49   |   (0) comments


2017 marks the fifth consecutive year for Mastercard at Mobile World Congress and it was a great time to reflect on the amazing advances the payments industry has made as well as discuss "What's Next' in the digital commerce future. We spoke to James Anderson, executive vice president of digital payments at MasterCard, about digital wallets to tokenization to ...
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
High-Band 5G: Let's Address the Range Question, Shall We?
Dan Jones, Mobile Editor, 3/21/2017
FTTH No Slam Dunk for Cable
Carol Wilson, Editor-at-large, 3/23/2017
Eurobites: A1, Nokia Turn It Up to 11
Paul Rainford, Assistant Editor, Europe, 3/22/2017
Nokia & Facebook Push Undersea Fiber to 32 Tbit/s
Craig Matsumoto, Editor-in-Chief, Light Reading, 3/21/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
At MWC 2017, Qualcomm's CTO Matt Grob talks to Light Reading's CEO and Founder Steve Saunders about the progress being made in the development of the technologies and standards that will underpin 5G.
Animals with Phones
Neither Do We Click Here
Is that a prerequisite?
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.