Jun
15
2011

Investors Worry About Sprint LTE Migration Costs – Believe It Will Cost More, Take Longer Than Sprint Estimates


It’s pretty much the worst-kept secret ever that sometime this summer Sprint will announce that they’re making the transition from Mobile Wimax to LTE (running both simultaneously for some time). At the heart of that project sits a complete base station retrofit, which involves replacing current network hardware and base stations capable of utilizing multiple bands, including the company’s 800 MHz, 1.9 GHz spectrum, 4G 2.5 GHz WiMax, and LTE. While Sprint has pegged this upgrade at around three to five years and $5 billion, Sprint stock has taken a recent hit on analyst concerns that the transition to LTE will be far more costly and time-intensive than Sprint is acknowledging:

“It appears as if Sprint Nextel is facing quite a complicated network-upgrade cycle, with many disparate partners, vendors, technologies and challenges,” wrote Stifel Nicolaus analyst Christopher King last week. . .It could take longer than the three to five years that Sprint has projected, in part due to the legacy networks it operates as a result of its merger in 2005 with Nextel…..”The main problem they have is that they have too many technologies,” said Charles Golvin, an analyst with Forrester Research. Sprint would like to ride that LTE wave. Today, they are operating these three different networks. They have a path into the future of a single integrated network that will allow them to get on this main tech track, but to get there is a pretty complex engineering challenge.”

Sprint is expected to announce the transition to LTE sometime this summer, as well as a network sharing arrangement with LightSquared — assuming LightSquared can mitigate GPS interference hurdles.
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