If they go to lte, they will be bankrupt in about 5 years.
Here is why. The flat out truth is this. Sprint would need to spend about 6-7 billion dollars on top of the 5 billion dollars they already spent. The 20 billion will barely covers sprints debt, they would have to take out 5 billion more to get lte out. By the time they get full lte coverage with the first 5 billion, which would take about 3-4 years. Verizon would be on lte-a. Which would out perform sprints network by leaps and bounds. Top that off with the operating costs of the network going up about 3 times more then they are now, will offer the nothing new to the market, have a smaller foot print then the other two, and still have to build out the rest of the 3g and 4g networks in the areas they do not cover? Not going to happen.
Let me but it in plain simple English. If sprint goes with lte, it would be like a person that earn 10,000 dollars spending 100,000,000 dollars on a car to drive to work. Honestly, lightsquared ideas have been tried before and do to the problems with solar interference and maintenance cost it was quickly abandoned.
I could understand the move if sprint had about 10 billion dollars just laying around. But even with this deal, they are still about 8 billion short in the next 15 years and they have to spend 10 billion dollars more to get the network to compete with verizon.
Sprint was given about 6.4 billion dollars to begin with. They spent out 5 billion dollars on wimax. They screwed it up so badly, I am frankly surprise it works. Verizon is spending about 5 billion to upgrade lte. The cost is so low because they own the patients and license for the technology.
Verizon already said it was 5 billion in the next 5 years and x billion on down the road. With this deal sprint will have about 5 billion dollars and zero partners, besides lightsquared, which in my personal opinion will not work.
If they go lte, they will have to go it alone, not even verizon can do that, verizon had to get 8 partners to build out lte. Sprint wants to spend the faction of the money that verizon and att are spending, with a partner with a company that could not figure out 4 years ago that it would screw with gps. I could have told you that.
But you want the big kicker? You know how they are going to have to get around the gps issue? You really want to know? They are going to have to cut back the power on the tower by 50%? So each tower will produce 50% less signal and off the top of my head 3/8 less speed, off the top of my head.
Lightsquared, I just don't see how it is going to work, it has been tried before, it will just not work with lte. They simply can not build out a network alone. If sprint does these, they will go it alone and going it alone is going to be a colissal failure. Why? Because sprint had the best technology handed to them, they had the 6.4 billion dollars handed to them, they had over 30 partners fully backing them up, and they failed.
The only pratical way this is going to work.
Sprint rents out tower space to lightsquared, not spectrum, and continues to build out wimax.
This would not cause sprint to have to redo the 5 billion dollars already spent and spend 5 billion more on upgrades. It would give them a permanent renter for their towers, and allow satellite back haul in remote areas.
But if sprint wants to deploy a lte network with or replace wimax with lte, it would be like buying a space shuttle to get to the work.
They already have a great technology, all they have to do is get it working right.
PS. Lightsquared uses satellites to backhaul ground based towers. Sprint is letting letting lightsquared build out lte on sprint towers for the 20 billion dollars. They are just renting tower space. No spectrum, at least as far as I understand, is not exchanging hands.
Bottomline, sprint need to cross the river, not stop in the middle and try to figure out what to do, they wasted a ton of money on stupid stuff already. I hope they will stop wasting money and build out the network, regardless what they use.
/rant off
