Now you’re talking about accounting differences — between an initial fixed cost for setup, and ongoing costs (theoretically variable, but limited by contract) for the DS3. Thus, there is a point where the greater cost of installation is eclipsed by the savings.

In your example of 24 T1 lines (almost a T3) vs. 1 DS3 line, the monthly cost of DS3 is one-quarter that of the T1 copper, with a $9,000.00 monthly savings. You can string a LOT of fiber, even (perhaps especially) in a dense metropolitan area, knowing your ongoing costs will be $108,000.00 LESS per fiber line, per annum.

Said another way, you can get a quicker payoff of fixed costs. In more suburban settings or less densely populated areas, sure you’re going to need T1. But you’ll also find a lot less concrete and steel obstacles to reduce signal.

On the topic in general, Sprint has made a gamble here, and we have yet to see if it will pay off.

As far as selling the pipe, Sprint was right to do so. Look at the previous market model of telephone long-distance as the market reached maturity. “Pipe” revenues were reduced down almost to the billable cost of 1.x cents per minute.

In cellular, the same will come true as the market matures. The revenues will NOT be in the pipe. They will be in the service provider and content. Sprint has had to make up for some blunders with cutbacks that affect customer service, but that can be rectified.

Just the allure of being the only 4g network got me doing my research on how to get a phone supporting it, which led me to this page. And I’m a T-Mobile (Blackberry) business customer who depends heavily on UMA to lower our costs. So Sprint has a hook with 4g, and with its packaged program at $99. If they can ramp up the customer service quality to keep customers they snag with these lures, they’ll be fine.

Mobile customers don’t switch carriers month-by-month. There are such a thing as service contracts, and such a thing as constant introduction of new and updated phones which carriers provide free or at discount to entice current customers to renew. Thus if Sprint can gain a bigger footprint by concentrating on marketing and customer service, they have a fairly decent fighting chance of making this work.

I do not count Sprint out.

http://www.unstrung.com/blog.asp?blog_sectionid=414&doc_id=165037

http://online.wsj.com/article/BT-CO-20090304-714762.html

It’s much easier (read: cheaper) to carry 24 T1s over copper back to the CO than run a 750ft DS3 to a fiber drop and OCn MUX. I much prefer your ideal world of ‘why not get a DS3 instead!’ though, believe me.