By Kevin Fitchard, GigaOM Once again, Sprint ( S) and Clearwire ( CLWR) have thrown their lots together, agreeing to pursue their 4G future as a team. The technology is different, but the situation remains the same: Sprint needs a mammoth LTE network, and only Clearwire is in a position to build it. To do that Clearwire needs cash, and while Sprint has committed to pony up $1.6 billion and to match any equity Clearwire raises, that investment will only be enough to plant the seeds of the 4G network they want to grow. If the two of them want to take on Verizon ( VZ) and AT&T ( T) in the coming mobile broadband war, they will need to check their caution at the door. With more than 100 MHz of spectrum, Sprint and Clearwire can build the biggest, baddest mobile broadband network in the industry -- the only thing holding them back is depth of their pocketbooks. It's pretty clear, though, that both operators are still thinking conservatively. Clearwire plans to overlay a time division-LTE (TD-LTE) network on its WiMAX infrastructure, which covers 132 million people in 72 markets. But Clearwire won't be covering the entirety of those cities. Instead, Clearwire will target the most heavily trafficked cell sites. These hot zones will create big pools of capacity in downtown cores, campuses and commercial districts. Except in rare cases, a device won't be able to traverse the length of a city's limits while maintaining a TD-LTE connection. Covering the full extent of its current footprint, to say nothing of reviving its halted nationwide expansion, will just have to wait until it gets more funding, Clearwire CTO John Saw said in an interview with GigaOM. “The plan is to provide LTE where its needed the most – to provide additional capacity where there’s currently the most demand,” Saw said. “We’re open to discussing with Sprint about opening new markets, but that’s not our number one priority.” That strategy puts severe restraints on Clearwire’s business model. If it only provides pockets of capacity, Clearwire can’t retail the service unless it combines it with WiMAX. Also, Clearwire will no longer be able to provide a complete network to wholesale customers. A Best Buy would have to contract with another operator for LTE and then use Clearwire’s network as backup, if it wanted to use TD-LTE for anything other than hotspot coverage. That probably explains the troubles Clearwire is having with its wholesale customers that aren’t named Sprint. Comcast and Time Warner, two of Clearwire’s principle investors, are canning their WiMAX services over the next six months and eventually becoming mobile virtual network partners on new partner Verizon’s LTE network. Clearwire’s LTE rollout may be less than optimal for its other wholesale customers, but it’s custom-fitted for Sprint’s mobile broadband plans. A supplemental LTE network is exactly what Sprint needs. Sprint and the amazing Technicolor dream network
Sprint plans to launch an LTE network of its own in mid-2012, offering its first LTE handsets in the latter half of the year. While Sprint can deploy that network far and wide, it can’t deploy it very deep. It only has 10 MHz of free PCS spectrum, which means it can only design a system with half of the capacity of Verizon and AT&Ts’ current LTE networks. Sprint has several plan Bs, but none of them give Sprint an assured immediate source of capacity:
- It’s partnered with LightSquared to host the latter’s LTE network on Sprint’s new-fangled technology-agnostic base stations. That would give Sprint the equivalent of another 10 MHz of capacity, but not if LightSquared can’t get its network plans approved.
- Sprint also plans to start reallocating its 3G CDMA spectrum to 4G once data traffic shifts between them, but that shift could be a long time coming. Sprint just launched the CDMA iPhone, which has dibs on the 3G network.
- Finally Sprint plans to sunset its Nextel iDEN network, freeing up some choice lower-band spectrum, but that won’t happen until 2013.
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