William Ho, mobile telecommunications industry analyst, consultant and commentator, has published an article over at Fearless Wireless discussing Sprint’s new Chief Executive Officer speaking at a recent investor briefing. Sprint’s new boss, Marcelo Claure, has been in place for a month. When appointed, he announced that his priorities included reducing prices, improving the network and decreasing operational costs. We’ve seen decreasing prices already and expect these to be ongoing, starting something of a price war in the US market. We should see decreased operational costs partly through internal efficiencies and partially through being able to use their parent’s buying power for network infrastructure and equipment.
It’s the network improvement aspect that’s most interesting because Sprint have withdrawn from the plan to blanket the USA in 2,500 MHz LTE coverage. Instead, they are now to “smartly concentrate” their 2,500 MHz LTE rollout in a few cities. The plan is to have an excellent high speed LTE network to provide customers with 100 to 150 Mbps speeds, market regionally and improve the service and network reputation. Sprint’s high speed / low speed network could result in customers experiencing a very high speed service in a few key areas, dropping to a much slower network when they’re out of a Sprint 2,500 MHz LTE zone. In the short term this seems at odds with Sprint’s parent, SoftBank. SoftBank Chairman Masayoshi Son has said he wants to bring higher mobile broadband speeds to the US and he wants to win. This announcement is for the short term; essentially Sprint have said it would take too long to provide a national 2,500 MHz service. I am sure that this is their ultimate goal.
By way of background, Sprint have available coverage for their LTE network in the 2,500 MHz and 800 MHz points; their 2,500 MHz spectrum is associated with Sprint’s early jump into next generation networking technologies, WiMAX, which has effectively been and gone. The first WiMax handset sold on the Sprint network was the HTC Evo 4G, on sale back in June 2010. Sprint declined to bid for additional spectrum in the AWS-3 auctions, primarily because US regulators would likely reduce any spectrum it acquired, block the purchase or force it to share with other carriers because of the existing spectrum it owns in the 2,500 MHz band. The higher the frequency, the shorter the penetration of the signal but the higher the network speed: analysts believe that the Sprint’s 2,500 MHz LTE network should be able to provide customers with download speeds of between 100 to 150 Mbps. By comparison, their 800 MHz frequency will be significantly slower – figures of 10 Mbps are being touted – which is a significant step down in terms of network performance.
We don’t know the size of these high speed areas compared with the low speed areas, but the idea of a big carrier promoting itself at a local level is interesting. And I tend to agree: do not fight the way your opponent fights. We know that T-Mobile and Verizon are rolling out their low frequency, higher penetration LTE networks (on the 700 MHz spectrum) and we expect AT&T to follow. Sprint, “America’s Newest Network,” needs to do the same with its 800 MHz spectrum. Being able to offer the fastest network in a locality backed up by a slower but consistent national network may be one way to win back customers. What do our readers think? If your city acquired a reliably 100+ Mbps LTE network, would you move (or stick) with Sprint? Let us know in the comments below.