Sprint CEO Confirms Clearwire Hosting Talks
More Information (Read: LTE Plans) to Drop This Summer
Confirming what we already know
, Sprint CEO Dan Hesse this week acknowledged that Sprint and Clearwire have been in talks about letting Clearwire ride over Sprint's upcoming $4-5 billion base station retrofit
. "It has been reported that there are some discussions between Clearwire and Sprint about the potential of Sprint hosting some spectrum," Hesse stated at a J.P Morgan conference this week. "That's a potential that could happen. It's more economical for Clearwire to host it vs. building a separate network." While Hesse confirmed talking with Clearwire, he isn't yet mentioning the rumor Sprint is working on a similar deal with Lightsquared, as we exclusively reported in March
(since supported by reports in the Wall Street Journal
). Sprint's likely not yet ready to show their hand about the company's likely migration to LTE, an announcement that's expected sometime this summer.
Re: Sprint/Lightsquared/Clear sharing needed to stay alive That's how competition works. It's only because Spint got pummeled the last 5 years that they've lowered prices and caused the other companies to lower prices. Cellphone margins are on their way out the window. The T-Mobile merger is going to accentuate this even further and one of the reasons it needs to go forward. (I find it ironic that T-mobile is running monthly cellphone mugging commercials when they are about to be purchased by the biggest mugger in the industry)
With sprint in last place and at 5-20% market-share they will either need to innovate faster than deep pocketed opponents or lower prices and steal customers through price competition. Sprint choose the later and started the everything plans a couple years ago. Since that initial plan costs have went from $99 to $79 and I fully expect further erosion of margins. T-mobile matched the $79 offering recently so sprint will have to drop prices again.
Make no mistake, as long as there are 3 companies offering national service and the market is no longer growing exponentially (growth rates matched population growth for the last 2 years) the price competition will begin in earnest. I believe everyone has noticed the significant difference in pricing that's begun in the last year or two. The only area where cell phone companies can gouge anymore is the data rates and that's going to rapidly become competitive as the vast majority of customers that will want/need data will have it within a year or two.
There is a distortion in the free market that occurs while a new product rolls out to the population and growth rates are guaranteed regardless of pricing. Once that simmers down the competition begins in earnest. Talk and text are now fully competitive and data should be within a year or two. Once data is fully competitive any remaining margin from excessive charges on data should begin to go away as the companies are forced to retain customers against a competitor with nothing to lose. We want sprint to be at the bottom while still having a national network. It will be disastrous to margins at ATT and Verizon as they try to retain customers.
Re: Combination Yeah, I knew they had something up their sleeves. Are they fully co-locating at each other's sites? That at least gives them a fighting chance. I really liked Clear's plan to use Wal-Mart or something as towers, they should go through with that, it would provide them with some insane coverage.
@bandit8623: Sprint's coverage sucks. Around here, T-Mobile has haphazard, coverage, but they have been attempting to build out a bit (even though no one has them), while AT&T has the best and Verizon is a close second. Sprint hasn't even gotten on a new tower that T-Mobile spearheaded, follow by AT&T and Verizon. I thought they were good in urban areas, until a friend who actually lives in an urban area told me that Sprint sucks there too, but T-Mobile is insanely awesome. Meanwhile, their nationwide coverage is absolutely pathetic. If you ever go on vacation, it's likely you will have no service (or if you're on contract have Verizon roaming).
Apparently it's good enough for the prices of VM or Boost though, since they added something like 700K prepaid last quarter.