Last week, LightSquared gave Sprint the option to purchase its wholesale LTE network if it ever gets built.
Today, Sprint's current 4G provider, Clearwire, declared that it plans to build an LTE-advanced network on top of its existing 4G network, WiMAX, once it raises enough money.
LTE technology was first deployed by Verizon last December and is quickly finding favor among heavy data-consuming mobile users. Based on Clearwire's trial tests, its LTE network boasts theoretical download speeds exceeding 120 Mbps.
"Our leadership in launching 4G services forced a major change in the competitive mobile data landscape. Now, we plan to bring our considerable spectrum portfolio to bear to deliver an LTE network capable of meeting the future demands of the market," said John Stanton, Clearwire's chairman and interim CEO, in a press release.
And in a clear slap to LightSquared, whose fate relies on both funding and proof that it does not interfere with GPS frequencies, Clearwire chief technical officer John Saw wrote, "Since we currently support millions of customers in the 2.5 GHz band, we know that our LTE network won't present harmful interference issues with GPS or other sensitive spectrum bands."
But there's an enormous caveat buried in the press release. Clearwire's LTE development plans are "subject to additional funding," which implies that Clearwire still can't afford the new 4G technology. And if the costs of Verizon's LTE network and LightSquared's ongoing mission for funding are anything to go by, 4G networks are extremely expensive. For almost every metro area it has added to its LTE network, Verizon easily spends more than a billion dollars.
So today's announcement really just crystallizes what Clearwire has hinted for a long time: that it will develop an LTE network once it can afford it. Most recently in May, COO Erik Prusch said Clearwire would eventually migrate from the underused WiMAX network to LTE. It helps that in April, Sprint committed $1 billion over the next four years for the use of Clearwire's 4G network. At the time, Clearwire's Stanton said, "We are pleased to have the resources and partnerships necessary to maintain our 4G leadership and leverage our significant spectrum and capacity for delivering mobile broadband services."
Does this mean Sprint's ditching WiMAX for LTE?
No! Sprint hasn't confirmed any LTE development plans, but it's becoming increasingly apparent that its 6.3 million 4G subscribers want something as fast as Verizon subscribers (Sprint's WiMAX has a theoretical speed limit of only 70 Mbps, though actual speeds are much lower). With today's announcement, it looks like Sprint has the option to purchase spectrum from Clearwire's proposed LTE-advanced network and LightSquared's proposed LTE network. But keep in mind that both are merely theoretical buildouts.
"That decision hasn't been made, it will be part of the Network Vision Strategy being announced this fall," said John Votava, a corporate communications manager for Sprint.
My colleague, PCMag's lead mobile analyst Sascha Segan, threw out a wild idea: what if Sprint bought spectrum from both wholesellers and offered dual-mode LTE phones? It could play on Clearwire's strength in urban areas and, as hinted, LightSquared's strong rural coverage. Great idea, even if only in theory.
Who is America's fastest non-theoretical network? See PCMag's "Fastest Mobile Networks 2011."