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Network World - If there's one telecom company that knows about the follies of supporting two distinct types of wireless technologies at once, it's Sprint.
After all, the carrier's decline as a top competitor in the wireless industry can largely be traced back to its 2005 merger with Nextel that left Sprint running both its own CDMA network and Nextel's iDEN network. The iDEN network proved to a major headache for the carrier, with Sprint posting net losses of just under 4 million iDEN subscribers over the last two years alone. Ditching the iDEN network hasn't proved an easy feat, as the company has just started this year to move its iDEN push-to-talk services off the old network and onto its CDMA network.
So if the reports are true that Sprint this month will announce plans to host LightSquared's LTE network on its own infrastructure, it means that Sprint will be hosting both LTE and the WiMax network it has built in conjunction with Clearwire. With Sprint potentially once again supporting two different types of wireless technologies for its 4G services, does this mean the company is repeating the mistake it made when it acquired Nextel?
DEBATE: LTE vs. WiMax
Not necessarily. The difference between WiMax and LTE is far smaller than the difference that existed between CDMA and iDEN, so the technical challenges of hosting both networks shouldn't be as difficult. But from a cost standpoint, says Gartner analyst Phil Redman, it will still pose significant challenges since Sprint's rivals will have a comparatively simple setup where they only need to support their own LTE networks rather than the LTE and WiMax networks of two different companies.
"There's no doubt that the cost of having two networks is different from the costs of having one," he says. "It's technically feasible, yes, but it still ... stretches out your engineers."
Sprint bet big on WiMax back in 2006, as it earmarked $5 billion to build a nationwide network with the assumption that having 4G services up and running before Verizon and AT&T got around to launching their own LTE networks would give Sprint a major competitive advantage in the wireless data marketplace. But with Verizon getting its LTE network fired up in 38 markets last year, Sprint's time-to-market advantage expired before the company had made significant progress in upping its customer base relative to Verizon and AT&T.
In fact, the drag of the iDEN network has resulted in Sprint actually losing wireless subscribers in the period since its WiMax network launched. In September 2008, when Sprint fired up its first WiMax network in Baltimore, the company had 50.5 million total wireless subscribers. By the end of last year, Sprint was left with just under 50 million wireless subscribers. And with LTE poised to become the dominant wireless technology in the U.S. for consumer handsets, Redman says that Sprint will be forced to gradually migrate from WiMax to LTE to remain competitive.
"There's no doubt they're going to start diminishing their investment in WiMax," he says. "It's a big challenge but the alternative is even worse so it's something they really have to do."