Sprint Nextel (S) announced a major nationwide expansion yesterday for its fourth-generation (4G) wireless broadband service as the company plans to launch services in 17 more US cities. This follows Sprint’s recent announcement of launching 4G services in Atlanta, Portland and Las Vegas in August 2009. The company previously announced 4G deployments in Chicago, Dallas, Philadelphia, Seattle and Honolulu during 2009.
The newly announced markets include specific cities in Texas, Washington, Idaho, North Carolina, Oregon and Hawaii. Moreover, the third-largest US wireless carrier also plans to launch 4G services in other US markets such as Boston, Houston, New York, San Francisco and Washington, D.C in 2010. Sprint is deploying its 4G network under the “Sprint 4G” brand based on the WiMax mobile broadband technology.
Sprint made history by becoming the first US carrier to launch 4G WiMax mobile broadband services in the U.S. with the official commercial service launch in Baltimore in early October 2008. The company further strengthened its 4G leadership with the launch of the nation’s first dual-mode (operates on both 3G and 4G networks) mobile broadband modem in December 2008 and the recent rollout of new 3G/4G mobile broadband routers.
The company is leveraging the WiMax network managed and operated by Clearwire Corporation (CLWR), in which it holds a controlling stake of 51%. This joint-venture resulted from the merger of mobile WiMax assets of both companies in December 2008.
Sprint’s 4G services are expected to play a significant role for its survival in the wireless market given the continued market share losses to larger rivals such as Verizon (VZ) and AT&T (T).
The 4G wireless broadband network offers customers super-fast network speed which is 3-5 times faster than the existing 3G networks that typically deliver network speeds up to 1.5 megabits per second (Mbps). In contrast, the download speeds enabled by the 4G WiMax network averages 3-6 (Mbps) with peak speed reaching more than 10 Mbps.
However, we feel Sprint’s first-to-market advantage for its 4G services may eventually erode as other Tier-1 carriers launch competing services. Verizon and AT&T have announced aggressive deployment plans for their respective 4G services in 2010-2011 timeframe based on the Long-Term Evaluation (LTE) wireless broadband technology, which is competitive or faster than speeds demonstrated by WiMax deployments.
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