4G: Cricket's Tiny Channels

Cricket Communications Inc. already has Long Term Evolution (LTE) in one market with plans to cover more this year, but don't expect the network to rival its competitors in size or speed.

Cricket President and CEO Doug Hutcheson said on the carrier's fourth-quarter earnings call that it will take it three to four years and "a lot of farming" to offer LTE on 10x10 MHz channels, like AT&T Inc. (NYSE: T) and Verizon Wireless . Instead, it will start out on channels smaller than 5x5 in a number of markets, but Hutcheson wouldn't commit to what size they would be.

"Whether we start on 3x3 or another combo remains to be seen," he said, adding that the carrier positioned itself to get LTE up and running on 5x5 MHz channels since an auction three years back. "We still have a path to do that, bring LTE up on a narrow channel then, as we start to add customers, move them into 5x5."

Even so, he expects the LTE network to start to bring value to Cricket by the end of the year. The carrier has about 23MGhz of spectrum reserved for LTE in each of its markets and plans to cover two-thirds of its footprint in the next two to three years.

Cricket launched its first LTE market in Tucson, Ariz., in December, shortly after it announced a deal to secure 700Mhz spectrum from Verizon Wireless to bolster its network in Chicago. (See Leap Launches First LTE Market, Verizon, Leap Swap Some Spectrum and Cricket's First LTE Market Coming Soon.)

The once-regional carrier plans to spend between $600 million and $650 million in capex in part on its LTE buildout and maintaining its 3G network, which Hutcheson said still has several years of valuable life remaining.

He also reiterated his belief that lower-priced 4G devices will begin to come out in mid-2012, which will help the business. However, he notes that contrary to popular belief, Cricket's customers have proved willing to spend $200-plus on smartphones, including the Huawei Technologies Co. Ltd. Mercury. (See Crickets Lands Android's Huawei Mercury.)

Even so, Cricket struggled in the fourth quarter, as its churn rate grew to 3.9 percent, the high end of its target range of 3.7 to 3.9 percent announced last month. Cricket still managed to add 179,000 customers in the quarter, beating its estimate of 175,000. (See Cricket Loss Narrows to $3.5M in Q4.) — Sarah Reedy, Senior Reporter, Light Reading Mobile

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