Sprint Unveils LTE Expansion Plan

Zacks

The third largest U.S. wireless network operator, Sprint Corporation (S), is teaming up with Competitive Carriers Association (CCA) and NetAmerica Alliance to accelerate 4G LTE deployment in rural America. Apart from this new partnership, Sprint is also planning to add 700 MHz Band 12 to its devices beginning next year.

The aforementioned partnership has been named as Small Market Alliance for Rural Transformation (:SMART). As per the deal, CCA and NetAmerica Alliance subscribers will be able to roam on Sprints’ LTE network through CCA’s Data Services Hub. On the other hand, Sprint can use CCA and NetAmerica Alliance local networks.

The collaboration is expected to enhance Sprint’s LTE coverage to 250 million people by mid-2014. Sprint’s competitior Verizon covers over 300 million customers under its LTE network.

Verizon Wireless started a program in 2010 called LTE Rural America in order to widen its LTE network coverage in rural areas. The company leases its 700 MHz spectrum to rural mobile operators to build LTE network. However, CCA President and CEO, Steven Berry feels that Sprint’s program is better than Verizon’s as operators are not forced to use Sprint’s spectrum but can use their own spectrum as well.

Deployment of LTE network is rapidly gaining global momentum. Recently, the Global Mobile Suppliers Association (GSA.V) reported that currently 274 LTE networks are commercially available in 101 countries. The GSA estimated that more than 350 LTE networks will be commercially functional by the end of 2014.

Notably, in Nov 2013, the GSM Association’s research wing, GMSA Intelligence, forecasted the existence of over 1 billion global LTE connections by 2017. It also reported that LTE users consume more data and also generate 10-40% higher average revenue per user (:ARPU) than non-LTE consumers.

We believe that this new initiative taken by Sprint will help the company to safeguard its position against major companies like Verizon Communications Inc. (VZ), AT&T, Inc. (T) and T-Mobile US, Inc. (TMUS). Apart from this, the company’s revenues and ARPU will also benefit from the collaboration going forward.

Sprint currently has a Zacks Rank #3 (Hold).

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