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Summary:

In this second part of a three-part interview series, Sprint CEO Dan Hesse addresses Sprint’s next generation wireless broadband options, the future of Clearwire and what Sprint plans to do with the spectrum that will free up when it eventually shuts down Nextel’s iDen network.

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“Our 4G strategy is WiMAX, full stop,” said Dan Hesse, CEO of Overland Park, Kan.-based mobile phone company Sprint. In an interview, Hesse, a 33-year veteran of the telecom industry, said people should ignore all the talk about Sprint switching to LTE.

In this second part of a three-part interview series, Hesse addresses Sprint’s next-generation wireless broadband options, the future of Clearwire and what it plans to do with the spectrum that will free up when the company eventually shuts down Nextel’s iDen network.

“When we had the opportunity to move into 4G, WiMAX was the only 4G interface, and it was perfect with the spectrum we owned (2.5 GHz),” said Hesse. That early move gives his company an advantage over its competitors, which are going to be rolling out their 4G networks later this year or next year. “We moved to establish the network because we didn’t want to wait, and we believe that being first to the market is an advantage.”

Sprint later merged its spectrum with that of Clearwire, which now provides the 4G pipe. So what about these LTE trials being run by Clearwire? “We have so much spectrum that we decided to do tests so in case we have multi-modal phones with other air interfaces, we can add LTE on top of WiMAX and run both networks,” he said. “We have not announced a decision to put LTE anywhere in our network, and we are not intending to. Our 4G strategy is WiMAX, full stop!”

From afar, it seems Sprint’s relationship with Clearwire has become quite testy. In September, some of Sprint’s executives quit Clearwire’s board amid speculation that Clearwire might sell some of the spectrum to T-Mobile, a rival of Sprint.

“We had seven seats on the Clearwire board,” he said. The company hasn’t given up those seats, but instead it is opting to replace three of its executives with either different members of its management team the Sprint board or independents. This is driven primarily by a recent legal ruling (American Needle v. NFL) pertaining to other parties. Hesse was pretty clear in letting me know who was the boss when he said, “We own 54 percent of Clearwire.”

“The greatest single asset Clearwire has, more than any other [wireless] company is the spectrum it owns, and it is its greatest competitive advantage,” said Hesse. “So they should hold on to that spectrum in my view.” People shouldn’t read too much into Clearwire testing the option of selling its spectrum to raise capital to continue building their network. “My own view is that they won’t be doing that.” I wonder if Clearwire has any other choice? The company has billions of dollars in debt coming due next year. It will either have to hit the public markets again or have Sprint (and other current investors) pony up more dollars.

Sprint is also looking to re-deploy the spectrum that will be freed up with the eventual shutdown of the Nextel iDEN network. “2G will eventually come to an end. CDMA will come to an end. GSM will come to an end and iDEN will come to an end,” he said. “Over time, as fewer customers are using our 2G networks, we can use that spectrum for the CDMA/EVDO network.” Since iDEN is deployed in the 800 MHz spectrum band, it has good propagation qualities, especially inside buildings, so putting CDMA/EVDO on it makes sense, especially for voice-oriented services. Sprint’s current network runs in the 1900 MHz band. There’s no time line for this shift, but Nextel subscribers — 6.1 million at the end of third quarter of 2010 — are on the decline, and it won’t be long before Sprint starts to move.

In Part III of this three-part interview, Hesse talks about M2M communications and the future of telco. In Part 1 of the interview, he talked about smartphones and tablets like the iPad.

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  1. [...] [Via GigaOM] RELEVANT ENTRIES: [...]

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  2. Full Stop for Sprint. 20 Billion in debt and the inability to see not so much as one step into the future will be the cause of this hodge-podge company’s demise. Dead Stop.

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  3. Bad move by Sprint.

    By putting all its eggs in the WiMAX basket, Sprint will be isolated in an LTE world.

    Basically the entire planet is moving to LTE, which will become as ubiquitous as GSM was. Because the vast majority of worldwide handset sales will be to LTE networks, the best and most desired handsets will be available on LTE networks first. This is one reason why Verizon is migrating from CDMA to LTE.

    Business users and travelers won’t want to use a WiMAX network because they won’t be able to travel to most international destinations with it.

    Going WiMAX is a bizarre move by Sprint, and CEO Dan Hesse will have to take the blame when the public shows its preference for LTE.

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    1. The point of WiMAX is you get more coverage with less towers and greater speeds than LTE. That means better blanket coverage in major cities and better coverage in rural areas. Much akin to CDMA hence the best blanket coverage is with Sprint/Verizon as opposed AT&T/T-Mobile. So it’s not a bizarre move it’s a natural progression of the blanket coverage that you get with CDMA. Logical step for a cash strapped carrier to move to a platform that gives better coverage with less towers, hence less overhead. So if Sprint is placing all it’s eggs in one basket what is Verizon doing? Putting all it’s eggs in the LTE basket?

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      1. Yes, the analogy to CDMA is fair enough.

        CDMA gave a much greater range than GSM. At distances longer than 20 miles (30km), phasing errors make the GSM signal unusable. Despite that, GSM trumped over CDMA.

        CDMA networks previously existed in many western countries outside the USA. Most have now been cancelled and dismantled (or are in the process of being phased out). CDMA remains in patches of Eastern Europe, and a few third-world countries, who chose it because it requires less towers.

        WiMAX will become isolated just like CDMA. WiMAX will be used by some third-world nations that do not currently have extensive copper phone networks.

        That’s not a good situation for US customers. Nobody wants to be on a little-used mobile system. Sprint should be planning an LTE network to match its competitors.

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      2. Old analogy, but beta was technically better than VCR…which won?

        Newer version…Blu Ray vs HD DVD. Blu Ray won due to content availability…ie ecosystem support.

        Also, the spectrum position of Clearwire(2GHz) kills the whole tower spacing argument. They will need many more transmitters than LTE @ 700MHz for coverage. And speed? They are both OFDMA based technologies. Both will be comparable from a througput perspective and have more speed than most consumers will need in the near term.

        All things being equal, go with global support.

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  4. Verizon is not going going to use LTE for voice, neither will AT&T. LTE is a data-only standard. In the future, when Voice Over IP becomes as mature as the legacy circuit based telephone, then maybe. But until then, Old-Fashioned circuit telephone is here with us. The carriers will not invest in new equipment until they are absolute certain VoIP is mature. VoIP still has issues that need to be resolved(QoS, 911, MisMatched standards,etc.). Why fix something that isn’t broken? Especially when that system has a century of history.

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  5. [...] In Part I of the three-part conversation, Hesse talked about the importance of Smartphones and the iPad. He discussed Sprint’s relationship with Clearwire, LTE and its 4G strategy in Part II of the interview. [...]

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  6. [...] Sprint CEO: Our 4G Strategy Is WiMAX, Full Stop!: Tech News « October 29, 2010Tracked on [...]

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  7. LTE trolls punished!

    Wimax is the only real 4G.

    Clear rules the air.

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  8. [...] network, beginning the phase-out of iDEN cell sites starting in 2013. This is in line with what Hesse recently shared with Om and a good sign for Sprint, which has been weighed down by the iDEN network for [...]

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  9. [...] CEO Dan Hesse recently told me that Clearwire’s WiMAX network was its 4G strategy. In the high-speed wireless future, Sprint [...]

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  10. [...] was the quietest of the four carriers on its 4G plans. Sprint has been raving about its WiMAX network while Verizon came on strong at the end of last year with the launch of its LTE network covering 38 [...]

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