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The cost of switching to LTE: Sprint to spend $10 billion over the next two years
Wonder just how much it costs to phase out iDEN and WiMAX networks and put all your eggs in one, CDMA / LTE-flavored basket? Well, Joe Euteneuer, Sprint's CFO, just offered up a frank answer here at its "Strategy Update" event: $10 billion over the next two years. That's a heckuva lot more than the $4 billion to $5 billion Wall Street was expecting, but Euteneuer assured all the suited-up financial analysts in the room that the company should save $10 billion to $11 billion through 2017 (a figure widely reported before today), with $4 billion of that resulting from not having to maintain the 'ol ball and chain iDEN network anymore. Now it's true, we're a minority in this meeting of industry analysts, but you don't need to be a banker to understand that's one telling figure: clearly, the company's betting its future not just on the (CDMA!) iPhone, but LTE's brand of 4G.
Sprint converts its network to LTE, plans 'aggressive rollout' to be completed by 2013
We knew more or less that an announcement of this sort was coming. Back in July, Dan Hesse had teased us face-to-face with the promise of a "great story this fall around 4G," and now the time to tell that tale has arrived. At its strategy event today, Sprint finally went public with plans to "simplify its network" by converting its 1900MHz holdings and LightSquared's 1600MHz spectrum ("pending FCC approval") to LTE, an industry favorite. Helping the operator make that transition is the swath of 800MHz spectrum it reclaimed from the, now defunct, iDEN push-to-talk network -- which had been a drain on the company's resources. This spectrum, acquired from Nextel, will be phased out by mid-2013 and rolled into LTE. The company plans for a rapid deployment of this new 4G network, with the first LTE markets and handsets to hit in mid-2012, and the full rollout mostly completed by 2013. Current subscribers signed up for WiMAX plans won't have to worry as their devices will continue to be supported throughout 2012. Beginning tomorrow, Sprint's consolidating its 4G LTE (including LightSquared), 3G and Direct Connect networks into one single architecture. All the major technical milestones, such as test calls and field integration, have cleared their hurdles and work on over 22,000 cell sites are currently in process. Samsung, Alcatel Lucent and Ericsson have partnered with Sprint to install multimode 3G and 4G base stations to handle the network's future traffic, essential for deploying the multitude of frequencies required by hosted devices. Prospective iPhone 4S users on the network will be able to take advantage of better signal strength and improved voice service as Sprint intends to also offload the latter onto 800MHz. Expect a steep "reduction in roaming costs" and deeper signal penetration throughout the operator's expanding national footprint over the course of the next two years. Naturally, LTE speeds on this new network will be significantly improved over the currently in-use WiMAX, and a planned implementation of WiFi offloading should help to cut congestion by 20 percent. By the end of next year, Sprint aims to have a combined WiMAX/LTE population coverage of 176 million -- with 123 million covered by LTE and 76 million overlapping both. When the network build-out is nearly complete in 2013, the company should have over 250 million blanketed in LTE, far outstripping the stagnant 120 million served by WiMAX.
Sprint's LTE build out already underway, new 4G network to launch first half 2012?
At this point, it's pretty much an open secret that Sprint needs to hitch its ride to LTE to stay in the wireless game. CNET caught wind of the operator's intended 4G plans ahead of its scheduled October strategy announcement -- an event at which many in the industry expect Sprint to lay out its LTE cards. According to the report, the Hesse-led network's been hard at work installing the necessary infrastructure to convert to its towers to FD-LTE, which is the same flavor of LTE as Verizon and future partner LightSquared. Using the iDEN spectrum it acquired from its Nextel purchase, Sprint reportedly plans to set up 4G shop on those radio waves, and make use of current WiMAX provider Clearwire's proposed switch to TD-LTE by incorporating chipsets in future phones that accommodate both frequencies. The network changeover, rumored to cost Sprint somewhere in the range of $4 - $5 billion, should get carried out over the next five years, laying the groundwork for a true three-way 4G race.
