Early Adopters Don’t Always Win (e.g., Sprint can’t catch a break) - redux

I wrote previously that Sprint could not catch a break trying to differentiate their service (Early Adopters Don’t Always Win).  So from a network technology perspective, Sprint first made a deal with ClearWire for 4G services using WiMAX technology (Sprint-ClearWire).  This $14.5B deal in 1998 was supposed to seal Sprint’s future and leadership in 4G services - ClearWire brings the technology and Sprint brings the spectrum.  So, there are many curious elements – what the heck is going on?  We now find that ClearWire is experimenting and may be moving towards LTE (ClearWire LTE), with very successful field trials.  However, that is not the end of a potential change from WiMAX to LTE or strategy associated with getting 4G network capacity.

Sprint has now signed an over $10B deal with LightSquared for Sprint to host LightSquared’s network.  This leads to the clear (no pun intended) customer confusion and vendor confusion on where to place their emphasis – on WiMAX or LTE.  It also means that Sprint again has multiple networks, something that they have not shown themselves to be too adroit at doing.  If you remember, they bought NexTel which used the Motorola proprietary iDen system that provided a market differentiating “push to talk” capability.  Sprint was not able to manage the capacity growth on their two parallel systems, and the iDen network started getting bad word-of-mouth.  Today it is hardly the marketing or company building differentiator it once was.

At the same time that Sprint was probably negotiating their deal, the results of the commission created by the FCC to determine the impact of LightSquared’s LTE network on the GPS system were starting to become clear.  The results were not good in the extreme.  In fact, LightSquard has essentially admitted that they really do not have a plan to use their allocated frequencies for their LTE build-out (potentially using less than half their specturum), and floated the idea of using spectrum from another sources. 

Sprint says that is now has the ability to trade between its organic network, ClearWire’s WiMAX (and eventually LTE?), and LightSquared.  Stay tuned, Sprint is going to unveil their LTE plans on October 7^th.  It seems to me, that what Sprint was really after was a cash infusion from the investors in LightSquared – which if LightSquared can use only half their spectrum (if they can use any at all) may be in jeopardy.

So, while AT&T and Verizon Wireless are moving rapidly and definitively on their LTE deployments, Sprint again is moving in a bit in circles trying to move from WiMAX to LTE.  They have found that their early adoption of technical differentiators may actually turn out to be burdens (as they have to support three and then four networks – EVDO, iDEN, WiMAX, and LTE) and they really have not been able to take advantage to attract a substantial number of new customers.