US number three operator Sprint today confirmed a rapid move to LTE technology, targeting completion by the end of 2013.
The carrier used an event in New York to update the industry on its US$5 billion Network Vision project, an initiative announced last year that aims to allow it to operate more efficiently and help to lower costs by about US$10 billion over the next seven years.
Sprint currently supports a range of cellular technologies, including iDEN (2G), CDMA EV-DO (3G) and WiMAX (4G). However, global support for WiMAX as a 4G technology has waned recently and the operator today revealed that LTE – the 4G technology of choice for nearly all mobile operators – will be a primary future focus. Sprint’s president of networks, Steve Elfman, said that “rapid deployments” would be made in mid-year 2012, with rollout complete by 2013 – a more aggressive timeframe than previously announced. “Our original 3-5 year plan is more like a 2-3 year plan.”
The “aggressive” LTE deployment – as Elfman declared it – will take place in the 1.9GHz spectrum band, and the company is working with chipset suppliers such as Qualcomm to have LTE devices ready for launch by mid-2012.
Bob Azzi, SVP, Networks, said that the LTE speeds will be faster than its existing WiMAX network, although didn’t reveal specifics. “LTE was not available [when we first launched 4G] – that’s why we selected WiMAX. We had great success with that deployment, but think of this [LTE] as the next generation.” The operator expects to continue to sell WiMAX devices “through 2012.”
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.
However,
Sprint’s recent deal with LightSquared – if approved by the FCC – will also allow it to deploy LTE at 1.6GHz, and will be the first of what it calls ‘spectrum hosting’ deals. Helping the operator make the transition to LTE is the swath of 800MHz spectrum it reclaimed from the, now defunct, iDEN push-to-talk network. Elfman said that 3G (CDMA) and 4G (LTE) services would be incorporated into combined multimode units as part of its Network Vision plan (using kit from Alcatel-Lucent, Ericsson and Samsung), supporting 1.9GHz LTE and CDMA, 800MHz CDMA and 1.6GHz LTE (LightSquared) via a single radio. The operator plans to end up with 40,000 cell sites, down from 60,000 today, once the whole project is complete, a move that will offer more efficient use of capex (a 50 percent reduction in cost per gigabyte and a 50 percent reduction in cost per minute).
The operator also touted its ability to cope with a forthcoming surge in demand for data, now that it is offering Apple’s iPhone device. Wi-Fi offloading technology is being rolled out this quarter alongside “second-generation” femtocells, which Elfman said would allow Sprint to reduce data traffic on its cellular network by 20 percent. “We can handle the demand of the iPhone,” claimed Azzi. “We’re very well prepared for the growth expected in our customer base from that device.”
In fact, Dan Hesse, Sprint CEO, used the event to hit back at
claims that Sprint is taking a huge gamble by offering the new iPhone 4S. According to
Reuters, Sprint will need to pay US$500 to subsidise each iPhone it sells, leading it to lose money on the device until 2014. And the
Wall Street Journal has claimed that Sprint has committed to buy 30.5 million iPhones – a revelation that led to Sprint's stock price falling 10 percent earlier this week. “Yes, subsidies are higher on the iPhone than other devices,” stated Hesse. “Our expectation, based on customer lifetime value, is that this will be one of our most profitable devices. It will be quite accretive to our cash flow and profitability over time.”