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Optical/IP

Verizon Is Eating Sprint's 4G Lunch

Clearwire LLC (Nasdaq: CLWR) gave a sneak peak of its fourth-quarter results on Tuesday, including that it added 900,000 4G wholesale customers, down from 1.9 million in the previous quarter and 1.5 million in the second quarter. (See Clearwire Ends 2012 With 10.4M Subs.)

It wasn't all bad news for Clearwire, however, as it doubled its revenue to $362 million up from $181 million last year, beating analyst expectations. But, the decline in subscribers could be a reflection of stalled 4G WiMax sales over at its majority owner, Sprint Corp. (NYSE: S), which launched the iPhone in October. By contrast, Verizon Wireless sold over 2.4 million 4G Long Term Evolution (LTE) devices in the quarter and said it will have 24 LTE devices available in the first quarter of 2012, up from 18 now. Verizon also sold over 4 million of the Apple Inc. (Nasdaq: AAPL) device in the quarter. (See VZ iPhone Boosts Data, Shaves Margins in Q4.)

Why this matters
Sprint gave Clearwire the cash injection it needed to stay afloat last month, but it may have been distracted from selling its Android 4G phones by its iPhone investment and plans to build out LTE. While it's committed to using Clearwire's WiMax network until 2015, the network will eventually be supplanted by LTE. (See Sprint Keeps Clearwire (& Unlimited) Alive.)

The problem for Sprint is that it's at a significant disadvantage on its LTE network too. Verizon already reaches 195 markets in the U.S. and will match its 3G footprint by mid-2013, while AT&T Inc. (NYSE: T) has 26 markets deployed and a nationwide High-Speed Packet Access-Plus (HSPA+) network to fall back on. Sprint plans to launch just 10 LTE markets by mid-year. (See Verizon Plots 5 New LTE Markets, AT&T Promises Superfast 'Blended 4G' and Sprint's First 10 LTE Markets Coming by Mid-Year.)

Sprint may also need upwards of $3 billion to complete its LTE rollout, adding to its 4G challenges. The carrier reports its fourth-quarter earnings on Feb. 8. (See Sprint Needs $3B to Fufill Its 'Network Vision'.)

For more
See the latest on Sprint's Network Vision below.



— Sarah Reedy, Senior Reporter, Light Reading Mobile

sarahthomas1011 12/5/2012 | 5:44:44 PM
re: Verizon Is Eating Sprint's 4G Lunch

Sprint should reveal how well the iPhone is doing on its earnings call, but hopefully it's sold a ton. 900K isn't bad for 4G devices, but it's certainly not enough when WiMax is being phased out and LTE isn't out yet.

kaps 12/5/2012 | 5:44:43 PM
re: Verizon Is Eating Sprint's 4G Lunch

Call this Q1 of the "Sprint gives up on 4G" strategy. Sprint still leads Verizon by almost one and a half million 4G smartphones activated for 2011 total, though, 6.1 million to 4.7 million by my count. And remember Verizon pushed 4G LTE heavily with promotions during Q4: the double data deals, and a bunch of phone discounts. Don't expect that to continue in 2012, so my guess is that 4G numbers will remain flat or back down a bit as AT&T starts to compete.


And then there are all the 2010 4G activations for Sprint, another 3 million or so which will be coming up for renewal this year. When will Verizon take the 4G smartphone lead? Q2? Q3? Or are all bets off until the LTE iPhone arrives?

kaps 12/5/2012 | 5:44:43 PM
re: Verizon Is Eating Sprint's 4G Lunch

Call this Q1 of the "Sprint gives up on 4G" strategy. Sprint still leads Verizon by almost one and a half million 4G smartphones activated for 2011 total, though, 6.1 million to 4.7 million by my count. And remember Verizon pushed 4G LTE heavily with promotions during Q4: the double data deals, and a bunch of phone discounts. Don't expect that to continue in 2012, so my guess is that 4G numbers will remain flat or back down a bit as AT&T starts to compete.


And then there are all the 2010 4G activations for Sprint, another 3 million or so which will be coming up for renewal this year. When will Verizon take the 4G smartphone lead? Q2? Q3? Or are all bets off until the LTE iPhone arrives?

Red777 12/5/2012 | 5:44:41 PM
re: Verizon Is Eating Sprint's 4G Lunch

Sarah, pls read your own post. Sprint announced 10 markets for LTE by mid-year, of which it identified 4 of them at CES (mostly Ericsson markets, although one Alcatel-Lucent).  So your statement that "Sprint will only launch 4 LTE markets by mid-year" inorder to make your point is simply incorrect. You should read your own prior blogs.


I think you will be surprised how many markets will be up -- while it committed to ~75mm pops by end of 2012, I betcha it will be over 100mm, and teh pop coverage is only relevant to the custoemrs who are covered in those markets.

opticalwatcher 12/5/2012 | 5:44:41 PM
re: Verizon Is Eating Sprint's 4G Lunch

I made an interesting disccovery. If you do a Google search on Sprint, LTE, you get a hit on the Sprint site. The Google summary says:

<h3 class="r">4G LTE is coming to Sprint in 2012</h3>
<div class="f kv">www.sprint.com/nexus</div>

Sprint will launch 4G LTE in 22 communities in the first half of 2012. Find out where it launches first and check out 4G LTE devices coming to Sprint.


&nbsp;


But if you go that link, it only talks about the 4 communities that they've announced. Does this mean Google captured the page during a brief time that Sprint was announcing 22 markets by mid-year?


sarahthomas1011 12/5/2012 | 5:44:38 PM
re: Verizon Is Eating Sprint's 4G Lunch

You are right that Sprint committed to 10 markets, but only announced four. I'll get that updated - a typo, not purposeful! But, I think the point remains the same - Sprint is far behind on LTE and WiMax is dying. It's doing the best it can with 4G and the iPhone, but it's definitely in a trying situation for the short-term future.

joset01 12/5/2012 | 5:44:37 PM
re: Verizon Is Eating Sprint's 4G Lunch

CEO Dan Hesse announced 10 markets and named 4 at the Citigroup conference on Jan. 5. I asked a Sprint spokeswoman to clarify the numbers today.

She says:

"When Dan was speaking, he meant that the first 4 major markets will be launched in the first half of 2012. And, 6 additional markets in the surrounding areas will be launched shortly thereafter."

They're double-checking on the 22 communities number.

-- Dan


joset01 12/5/2012 | 5:44:37 PM
re: Verizon Is Eating Sprint's 4G Lunch

Because I'm curious too...


&nbsp;


Thanks


&nbsp;


Dan

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