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Sprint will be deploying an LTE 4G network for the first time.  (Source: Wikimedia Commons)

Sprint has traditionally backed WiMAX, a rival 4G technology. The new deal puts the future of the company's WiMAX network in limbo.  (Source: Sprint)
Third party communications firm will provide Sprint with its LTE services

Sprint Nextel Corp. (S) was the first major U.S. carrier to try to deploy a 4G spec. network.  Sprint's WiMAX network launched in September. 2008 and has slowly picked up steam adding more cities.  Sprint has indicated, though, that it may consider switching to LTE -- the 4G standard that Verizon Wireless (VZ) currently supports and AT&T Inc.'s (T) promises to soon support.

Now it appears Sprint is preparing to take the plunge, entering into a $13.5B USD contract with LightSquared to deploy an LTE network.  LightSquared licenses and owns large chunks of the so-called "L-Band" (1-2 GHz) spectrum, and thus has room to grow its LTE offerings.

The network will open in some markets next year, and will be available to over "260 million Americans" by 2014.

Under the agreement LightSquared will give Sprint $9B USD in cash for the infrastructure deployment, as well as "purchase credits" for LTE and satellite service valued at $4.5B USD.

Under the convoluted deal, which ties the two companies closely together, Sprint may be able to purchase extra LTE services from LightSquared, using the network it was paid to deploy.  Other carriers may also purchase LightSquared services (perhaps AT&T or Verizon).

LightSquared, who sells service to a number of small operators, such as Cellular South, also entered into a contract for 3G nationwide roaming on Sprint's network.  This part of the deal should mean extra money for Sprint, and could prove a boon to local network subscribers traveling around the country.

Overall the deal seems like a smart one all around.  Cash-strapped Sprint gets a big payday and the chance to sell LTE phones like the HTC Thunderbolt by HTC Corp. (SEO:066570) for the first time.  And LightSquared gains valuable infrastructure to license to players big and small.

The biggest seeming potential downside is the quandary the deal leaves Sprint's WiMAX network.  Now that Sprint is officially going to be adopting LTE, customers may be hesitant to purchase WiMAX handsets like the HTC EVO 3D or the Epic 4G by Samsung Electronics Comp., Ltd. (SEO:005930) -- particularly when Sprint charges $10 USD extra per month for WiMAX data plans on those phones.  A big question going ahead is whether Sprint will continue to expand its WiMAX network, or focus its efforts solely on LTE, going forward.

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RE: What's wrong with WiMAX?
By amanojaku on 7/28/2011 10:49:31 PM , Rating: 5
Sprint only picked up WiMAX because LTE did not exist four years ago. Sprint, losing out to Verizon and AT&T, jumped on WiMAX to get a competitive advantage as the first "4G" carrier in the US. Unfortunately, it backfired because the other carriers decided to wait for LTE. As a result, manufacturers like Cisco, Nokia and Samsung phased out or never built WiMAX equipment in favor of the upcoming LTE standard. If you can't buy it you can't deploy it, hence WiMAX is slowly dying. Yota, the largest WiMAX operator in the world, is also switching to LTE for this reason.

What vision33r said is incorrect; LTE is NOT 4G, it is 3G. LTE-Advanced is 4G, and it is not available yet since it was just ratified in June. WiMAX is not 4G, either, but it will be when 802.16m is built into the next WiMAX specification.

WiMAX and LTE have similar theoretical speeds: both aim for 1Gbit/sec to fixed locations and 100Mbit/sec to mobile users, although WiMAX has slightly more bandwidth in practice (~10-20%). Range is tricky, as WiMAX limits itself to 50km, while LTE can go up to 100km. WiMAX aims to guarantee performance at the cost of range, while LTE provides range at the cost of performance. In practice, both operate best under 5km. WiMAX is also more energy efficient, and less prone to interference and performance degradation over greater distances.

RE: What's wrong with WiMAX?
By Omega215D on 7/29/2011 2:27:33 AM , Rating: 2
But at the band that WiMax is in there will be penetration issues compared to LTE in the 700MHz range.

RE: What's wrong with WiMAX?
By ElFenix on 7/29/2011 10:29:19 PM , Rating: 2
This isn't quite right. Sprint had some use it or lose it frequency space and had to go with WiMax as LTE wouldn't have been ready to deploy soon enough.

LTE and WiMax are more accurately described as Pre-4G. HSDPA+ may not by 4G even under the new lax definition as it is not a forerunner to IMT-Advanced (which is true 4G).

EDGE actually meets the 3G definition (IMT-2000) but it wasn't until AT&T decided to brand HSPA as "3G" that anyone cared about "G"s. And now they're branding HSPA as 4G :roll:

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