For some months now, we have known that Verizon Wireless, AT&T and presumably T-Mobile will be leveraging LTE for their 4G networks. I've written before that this creates a large problem for Sprint as it would be the odd one out choosing instead to deploy a 4G network based on WiMax. Well now, Alltel announced last week that it also plans on adopting LTE for its 4G network. Is WiMax completely doomed? Will Sprint see the writing on the wall?
I don't see how in the long run, Sprint can carry on with a WiMax network for its 4G services. Four of the five major carriers in North America have formally announced or are expected to announce that they will deploy 4G networks based upon the evolution of GSM....hence the term LTE (Long Term Evolution).
Sprint is still facing enormous challenges, as it recently announced it lost 1 million subscribers in the last quarter. That company is still looking for ways to steer its ship back onto the right course. I think it needs to take some pretty extreme measures, including completely dropping its WiMax plans. I know there was a recent announcement regarding a deal with ClearWire, Google, Intel and others, but this to me still does nothing to help Sprint remain focused on growth.
Being the odd one out from a technology perspective creates huge challenges for Sprint. Most device manufacturers such as HTC, Nokia or Samsung, will look for the economies of scale they can find in developing LTE based devices that will serve most carriers. This means that WiMax based devices will most likely be developed and/or released AFTER their LTE based brothers. This creates another issue for Sprint. Consumers (both enterprise and personal) are also attracted by the carriers who can deliver the most cutting edge devices possible. Sprint will now almost perpetually be behind the other carriers in terms of device releases (save for the occasional exclusivity deal).
The other major problem I've mentioned before is the lost revenue opportunity from international users coming to America. As the dollar remains weak, tourists and professionals are increasing their trips and expenses in the US (one of the few good things about a weak currency). So when my cousing who is on Vodafone in France comes to America this summer, he will roam on either AT&T or T-Mobile, bringing those two carriers another incremental revenue opportunity. Verizon and Alltel will have that (eventually) but no such luck for Sprint. Flip it the other way, and the story stays the same. Sprint will be the only carrier not able to natively collect international roaming charges (how many devices does Sprint offer right now that can support a GSM chip?)
I could go on and on about how I think Sprint should see the writing on the wall, but will that change their plans? Heck, maybe the Clearwire deal is the first part of an exit strategy where Sprint then gets bought out by T-Mobile.
