Home The Spectrum Dance: Sprint Twice to the Altar, Twice Burned

The Spectrum Dance: Sprint Twice to the Altar, Twice Burned

The mating dance of the contemporary mobile carrier in the United States is a fickle and awkward ritual. The carrier has certain … needs … that must be met and finding a suitable partner becomes challenging. One only needs to look towards Sprint, the mawkish third child in the U.S. operator ecosystem and its recent history of suitors. Twice Sprint has found itself engaged and headed to the altar, only twice to be burned.

For years, Sprint has been looking to expand its spectrum footprint in the U.S. Bandwidth scarcity has never really been a problem for Sprint because it has a smaller user base than AT&T and Verizon. But, if Sprint plans on growing to join Ma Bell and Big Red in the top tier, it will face the same challenges. To expand its footprint, Sprint has tied itself to one troubled company in Clearwire and then to another with LightSquared. Truly, Sprint is cursed when picking dance partners.

The Estranged Wife: WiMax & Clearwire

Sprint has stated that it plans on rolling out a 4G LTE network to upgrade over its previous “4G” WiMax network. While WiMax has decent potential as a wireless standard, LTE is a more robust network based on the GSM standard. Like Verizon, Sprint needs to upgrade its aging CDMA network and WiMax was its first choice. The original “killer” Android smartphone, the HTV Evo, ran on WiMax.

This is where Sprint got in bed with Clearwire, the primary holders of WiMax spectrum in the U.S. The problem for Sprint is that Clearwire did not have the infrastructure to scale WiMax across the country as it had hoped. A series of bad decisions (such as spending more than $50 million for mall kiosks and stores) proved to be ill conceived. The idea for the Clearwire stores were to provide WiMax broadband to the home. The green and white stores were flashy … and empty. In talking to one sales representative a year or so ago, he told me that people wandered in more out of curiosity as to what Clearwire was trying to sell than any intent to buy. Frankly, he told me, he had no idea what the store was doing there in the first place.

The future of WiMax is destined to be local wireless broadband. It probably will not be facilitated by Clearwire, which had a deficit of $1.62 billion in debt at the end of 2011 and announced today that it will need a cash influx to survive the year. WiMax, as a “pre-4G” (or advanced 3G, whichever semantic term you prefer) technology is better suited to infrastructure than on mobile smart devices.

Sprint is the largest shareholder in Clearwire. That could prove problematic if (when) Clearwire files for bankruptcy. Clearwire holds 100 MHz of spectrum in many major American cities, an extremely valuable asset that may be worth more on the open market than the actual valuation of Clearwire.

Clearwire is moving towards deploying a LTE network, but it does not have enough cash on hand to fully develop it. All the eggs were in the WiMax basket. Sprint has started to deploy its own LTE services outside of Clearwire and has remained noncommittal on how much it will rely on Clearwire in the future.

The Budding Bride With the Major Flaw: LightSquared

When it appeared that WiMax and Clearwire were not going to work out for Sprint, it turned to the darling (or albatross) of the wireless industry, LightSquared. The Virginia-based startup planned on becoming a bandwidth wholesaler (like Clearwire) by turning satellite spectrum into a ground-based LTE network. This week, the FCC revoked LightSquared’s waiver based on the recommendation of the National Telecommunications and Information Administration and concerns over GPS interference. See our “Requiem for LightSquared” for more detail.

Sprint jumped in bed with another wholesaler with a dangerous business plan. For the second time, Sprint has been burned. The LightSquared deal would have rapidly accelerated the carrier’s LTE rollout but without the FCC waiver, LightSquared does not have a viable future. The battle is not over for LightSquared but there will be no movement on its regulatory troubles in the near future.

So, Sprint is now back to square one: upgrading its existing CDMA infrastructure to LTE on its own without minimal to no help from its proposed dance partners.

The Awkward Spectrum Dance

Three of the four major U.S. carriers have had very public and controversial relationships when trying to acquire more spectrum and upgrade to 4G technology. Sprint’s case is laid out above. T-Mobile and its parent company Deutsche Telekom have no plans for an LTE network. Left on its own, T-Mobile will build out its HSPA+ network to be as robust as possible. AT&T figured that it would acquire spectrum by subsuming T-Mobile. The FCC put the kibosh on that and AT&T has been having a tantrum ever since. Verizon has actually stayed clear of many of these troubles. It recognized early on that its CDMA network needed to be upgraded and that most of its capacity would need to be funneled to LTE. It has bought spectrum where and when it can, such as from the cable operators, and continued to build. When it comes to the awkward dance, Verizon is like the older brother standing in the corner smoking cigarettes and grinning while watching everybody fumble over themselves.

Sprint needs to be creative to be competitive. That is why it is the only U.S. carrier that does not cap data usage or throttle it past a certain point. In the long run, that strategy may be untenable. There are no more dance partners on the horizon.

Top and satellite images courtesy of Shutterstock

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.