Sprint Nextel Corp. (S) recently acquired Handmark Inc., a Kansas City-based developer and distributor of mobile applications, along with its subsidiary OneLouder Apps Inc. Both these companies are expected to aid Sprint’s Pinsight Media, which offers advertising services targeted at the enterprise segment. The acquired companies are also likely to enhance Sprint’s capabilities in branding and app development.
With the new takeovers, Sprint intends to focus more on emerging products in mobile application and services. We believe that the growing popularity of smartphones will increase the demand for mobile data services. Moreover, innovation and development in the mobile apps field will provide long-term benefits to the company on the expected exponential growth with the boom in the LTE network platform.
With respect to deploying LTE services, Sprint has made significant progress. As part of the Network Vision strategy, the company launched LTE services initially in five major markets, and currently covers over 88 markets.
In 2013, the company expects to have LTE coverage for approximately 200 million customers, 170 additional markets, depending upon backhaul availability. Sprint completed 32,000 sites and leased 31,000 sites at the end of Mar 2013. Further, the company also intends to provide 6-8 Mb network speed for downlink and uplink speed of 2-3 Mb to enhance data usage experience.
Going forward, the company also proposes to buy Clearwire Corporation (CLWR) to enhance spectrum capacity for LTE expansion. If this $2.2 billion deal materializes, gaining full rights over Clearwire would allow Sprint the access to radio frequency spectrum ranging 2.5 GHz, utilized in providing services using 4G 802.16e mobile WiMAX standards.
Sprint, which competes with telecom giants like AT&T Inc. (T) and Verizon Communications (VZ) currently has a Zacks Rank #3 (Hold).
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