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Summary:

A Sprint executive was quoted today saying that the nation’s No. 3 carrier is evaluating a switch to a Long Term Evolution network in the coming months, transitioning from WiMAX as its 4G wireless technology. But if Sprint dumps WiMAX, what happens to Clearwire?

Sprint CEO Dan Hesse

Sprint CEO Dan Hesse

A Sprint executive was quoted Tuesday saying that the nation’s No. 3 carrier is evaluating a switch to a Long Term Evolution network in the coming months, perhaps transitioning from WiMAX as its fourth-generation wireless technology. But if Sprint dumps WiMAX, what happens to its partner in 4G crime, Clearwire?

Sprint’s Senior VP of Networks, Bob Azzi, was quoted by FierceWireless as saying the carrier would study the rate at which its customers migrate from its 3G network to WiMAX over the next four to six months, and based on its spectrum, it would then evaluate a possible switch to LTE. This makes sense, as analysts I’ve spoken with assume Sprint will announce some time in the third quarter that it has chosen to use LTE since WiMAX as a technology can’t really compete on the speeds offered on the upload side, nor does it have enough support from operators — and thus from equipment makers — to evolve further.

We’ve known for some time that Sprint has tried out LTE equipment from various vendors, and that switching from its current gear to LTE involves a card swap as opposed to reconfiguring all the gear at the base stations or its tower network. A Sprint spokesman said today that its LTE decision would have to come from Clearwire, in which Sprint holds a majority stake. Sprint resells Clearwire’s WiMAX network under its own brand. But as large WiMAX operators such as Russian’s Yota or Japan’s KDDI have switched from WiMAX to LTE networks, the universe of possible WiMAX-gear-buying customers has shrunk. Clearwire, with its 1.7 million subscribers, is the largest WiMAX network around, and it’s floundering. That lack of operators deploying the technology makes it unlikely that telecommunications equipment makers will invest in next generation WiMAX technologies, making it a dead end as a network standard.

So Sprint’s hinting at LTE only makes sense, even if it did invest billions in driving WiMAX forward through investments in Clearwire and as recently as October insisted WiMAX was its strategy. I mean, if Intel can give up on WiMAX after its investments, Sprint, which has a business to run on top of a 4G network, can’t afford to keep dreaming. This throws the fate of Clearwire up in the air, as the operator has spent billions building out a WiMAX network and has struggled to add customers before its debt payments come due. Recently it halted its retail sales strategy and laid off workers. This caused Wall Street to speculate that Clearwire was giving in to Sprint demands, which could lead to more investment.

While Sprint is a logical buyer of Clearwire’s assets, it’s in somewhat of a Catch-22. If Clearwire fails, Sprint could see its bonds go into default, but if it buys Clearwire, BTIG analyst Walter Piecyk said in November Sprint may also risk default. Meanwhile Clearwire has a lot of spectrum, and has trialed LTE networks on some of it, but analysts are uncertain if Clearwire has the cash to make a switchover to LTE. Which means Sprint’s evaluation period may be a way of seeing what happens to its partner and buying time to make a decision. Right now the statements of Azzi and the statements from Sprint’s spokesperson aren’t in line. Clearwire doesn’t have the power here, and neither does Sprint.

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  1. If sprint move to lte it would be great that means iphone will be bound in sprint i dont think apple will go with wimax so its great news i hope they do it

  2. You don’t always want to follow what every other carrier is doing but in this case I think Sprint should have went the LTE route and not WiMax. On a global scale LTE is where carriers are going and manufactures are going to be more likely to build LTE devices than WiMax

  3. Eventually, both will go LTE; it’s a matter of when, not if. Remember that Sprint also has to migrate their FDD side (currently EV-DO) and the only viable migration path for FDD front is LTE at this point (this is what VZW is doing now). Given the recent upsurge of TD-LTE (TDD), there is a huge market pressure to go through LTE migration on the TDD side also. Clearwire will probably have to sell off some of their spectrum to keep going.

  4. It is an over simplification to state a simple swap at the base, that being said, Sprint has very little choice but Wimax. Some very smart money on the Street are buying up significant positions in S. Maybe a merger play is near.

  5. Please read what Dan said to OM: “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”

    The secret my friend is Broadcom BCS500. http://www.engadget.com/2010/02/18/beceems-bcs500-4g-modem-splices-wimax-and-lte-into-one-chip-sa/

    Looks like we can expect WIMAX + LTE phones in a few months. Clearwire would then switch entirely to LTE in 2 years and free up its WIMAX spectrum, when its most needed.

    I’m sure the above insight would generate another article.
    Thanks Stacy.

  6. If the author had done her homework she would already have the answer. Contrary to the theme of this article, there is “little” speculation what direction Sprint is going at this point. Sprint has mapped out their path for the next 3 to 5 years, they have selected their equipment vendors, and they have commenced the work necessary to effectively upgrade their network. “To what?” you ask… I’m not going to do your homework for you.

  7. If this is going to happen then it needs to happen now.

    I applaud Sprint for going with Wimax to push the 4G enevelope from the jump however I’d prefer not to be the odd man out when everyone else is running LTE.

  8. LTE or WiMax is not the question as it pertains to Sprint or CLWR. Multi-mode and software defined base stations make such a decision a lower cost inflection point. The key is build-out…fast build out…Sprint and Clearwire have an edge, but they gotta go faster and stop looking over their shoulders (as they miss a stride with every peek)..

  9. Sprint would likely get to LTE via CLWR. CLWR is testing LTE in a couple of markets and there are relatively minor differences in the core network between WiMAX and LTE. It will cost more $$ obviously to make any migration to LTE (mostly last mile/CPE), but Sprint has little choice. A complete new build-out of an LTE network outisde of CLWR would be foolish cash burn.

  10. Sprint 4G Speed | 2011 Mobile Broadband Review Sunday, March 27, 2011

    [...] soon would it happen? According to a Sprint executive, the decision to transition from WiMAX to LTE could be made this [...]

  11. Sprint & Clearwire Kiss & Make Up. But Where’s WiMAX?: Tech News and Analysis « Tuesday, April 19, 2011

    [...] testing the more common, alternative 4G technology known as Long Term Evolution, and is reportedly working toward a migration to the technology, something that has been made easier by its network overhaul, which will swap in new multi-modal [...]

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