Sprint's Hesse on LightSquared & Clearwire

Sprint Corp. (NYSE: S) CEO Dan Hesse isn't ruling out the possibility of a Long Term Evolution (LTE) deal with LightSquared -- or other potential partners -- but says that Clearwire LLC (Nasdaq: CLWR) remains a pillar of the operator's 4G strategy going forward.

Hesse was asked about Sprint's 4G options as part of a broad-ranging chat at the Deutsche Bank AG conference Wednesday morning. Rumors have been swirling since last week that Sprint has been talking to LTE startup LightSquared about a 4G wholesale deal. (See Sprint's 4G Options in Flux.)

"We don’t comment on media speculation," Hesse said at first.

Slightly later on in the conversation, however, he said that with Sprint's new multi-modal "Network Vision" base station strategy it is "technically feasible and possible" to support different spectrum from a wholesale partner on its network. LightSquared is planning to build out an LTE network using L-band spectrum in the U.S. (See Which Carriers Is LightSquared Working With?)

Hesse said that any wholesale deal would depend on how much Sprint had to pay to rent the spectrum versus what it makes on the eventual service.

He made it clear, however, that whatever happens Clearwire will remain part of the operator's 4G mix. "Every option that we’re looking at includes WiMax and Clearwire," Hesse said. "I think we should do more network sharing with Clearwire; we're just beginning to put that network equipment in place." (See Sprint Ready to Leapfrog to Multi-Mode.)

The issue is that the two have to clear up their pricing quarrel before moving ahead with any future strategy that may -- or may not -- include LTE. (See MWC 2011: Sprint Plotting LTE in 2012 or 2013?)

"The important thing is to resolve the pricing issue and we’re very close," Hesse told his audience. "I’d be very surprised -- very surprised -- if that didn’t happen."

This still means, however, that decisions on further funding for Clearwire are under wraps right now. "I’ll leave that to the finance committee and the board," Hesse said, when asked.

Overall, it is clear that Hesse will be happy when he is able to present a clearer picture of Sprint's ongoing 4G strategy to investors and the wider world. The company said in February that it should have the details hammered out within five to six months. (See MWC 2011: Sprint's LTE D-Day Next Month?)

"Boy, it would be good to know what we’re going to be when we grow up,” he said.

Hesse said to expect more news by the middle of the year. Knowing what it will do with 4G is crucial for Sprint for three reasons:

  • It is starting to spend money on its multi-modal strategy now and expects to roll out equipment in the second half of the year. The less money it has to spend on truck rolls the better.

  • Sprint has to plan how to potentially support 4G across multiple frequencies, with 800MHz being better for in-building coverage, while 2.6GHz is better for "volume," Hesse says.

  • Device makers need to be able to plan ahead for multi-modal smartphones and tablets.

All this leaves Sprint with one essential question: "It’s what we’re going to make versus what we're going to buy," Hesse told the crowd.

— Dan Jones, Site Editor, Light Reading Mobile

visionbuilder 12/5/2012 | 4:57:20 PM
re: Sprint's Hesse on LightSquared & Clearwire

    In May and June of this year full page adds appeared in major regional news tabloids soliciting interest from entrepreneurs and network providers in a private label, wholesale relationship with Light squared, signifying the realities on the ground of trying to meet an fcc mandate on new subscribers.

    I think along with the 'LTE' label, the fact this is a satelite network with a huge ?private? investor backing, and now the partnerships being created with sprint deserve interest.

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