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Sprint Gives 'Leapfrog' Details

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
10/27/2010

Sprint Corp. (NYSE: S) added some color to its network modernization plan on its third-quarter earnings call today. On the call, CEO Dan Hesse said Sprint's moves to reduce costs on its CDMA and iDen networks should start to have a financial benefit in 2012.

Light Reading Mobile reported last week that the company is looking for a multi-modal base station platform, codenamed "Project Leapfrog," that will help reduce CDMA roaming costs and coverage gaps, while allowing it to switch off some iDEN towers and possibly extend WiMax or LTE coverage in the future. (See 4G World: Sprint Ready to Play 'Leapfrog'.)

Hesse said on the call that the goal of the network modernization project is to support multiple air interfaces and radio frequencies with one overall platform at a cell site. "The way we’d think about it we’d go from multiple networks to one network," Hesse says.

The CEO stressed that that the project is still "in the early stages" and will take three to four years to complete. The company hasn't picked vendors yet, but it is considering six vendors and it expects to decide the project winners by the end of the year.

A major part of the plan is to open up more of the 800MHz spectrum that Sprint uses for Nextel iDEN services, for CDMA use in the future. Bob Azzi, SVP of networks at Sprint, said that the goal is to have "one CDMA carrier deployed for voice" in the 800MHz spectrum, although this will depend on suitable handsets being available.

All of this will lead to financial benefits for the carrier by 2012, Hesse said on the call. He added that it's possible Sprint has the leeway to speed up the project if it needs to. Losses continue
Sprint posted a loss of $911 million for the third quarter, almost double the $478 million loss it posted in the same period last year, even as revenue rose by one percent to $815 billion year-on-year.

Strong sales of the dual-mode 3G and WiMax High Tech Computer Corp. (HTC) (Taiwan: 2498) EVO and the popularity of Sprint's unlimited plans saw it add 354,000 new subscribers with two-year contracts this quarter and 644,000 fresh faces overall. Sprint expects that growth to continue.

Clearwire options
During the conference call, analysts pounded Hesse with questions about its "4G" partner, Clearwire LLC (Nasdaq: CLWR), following rumors that the operator is talking to T-Mobile US Inc. about spectrum and that Sprint execs left the Clearwire board (See What's Really Behind Clearwire's Board Reshuffling?)

Hesse didn't have much comment to offer.

Talking about future "4G" plans on the call, Hesse said Clearwire's network wasn't the only option for Sprint. "We do have alternatives we could consider," Hesse says.

— Dan Jones, Site Editor, Light Reading Mobile

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