Sprint's 4G LTE Sprectrum Buying Spree Continues With US Cellular

By Wayne Rash  |  Posted 2012-11-08 Print this article Print

The other reason is that T-Mobile is also buying up LTE spectrum and T-Mobile has already built out its infrastructure and backhaul so it can go live nearly all at once in 2013.

Basically, Sprint is already going to be behind the curve, moving slowly could make it even worse for this struggling carrier. But to keep moving forward, Sprint needs to have the cash to buy more. This may be the reason why the company just announced an offering of senior notes as a way to pay off its existing debt with new debt. This also means that Sprint doesn’t obligate SoftBank’s cash at a time when it wants to keep buying spectrum.

So what’s next? The chances are that the company is looking for another source of LTE spectrum. There’s still plenty of spectrum around, but the problem is finding a company to buy it from. AT&T is also buying, and can afford to spend more than Sprint, even with SoftBank’s backing. T-Mobile is also buying, and worse for Sprint, it’s in the low cost provider space where Sprint wants to be but isn’t. Even bigger competitive challenge for Sprint in its quest for spectrum is that T-Mobile has the billions of dollars it got from AT&T, a large stock of LTE spectrum that it got from AT&T and it’s got the backing of its own parent, Germany’s huge Deutsche Telekom.

Sprint is kind of between a rock and a hard place. It needs to find spectrum where it can and as quickly as it can if it’s to continue its growth. Unfortunately, buying ten percent of US Cellular isn’t going to do much to help Sprint grow. Worse, the doors are closing every day.

Clearwire is probably Sprint’s best path to salvation. Having controlling interest may help, but ultimately Sprint needs to own the whole company, so once it gets the current Clearwire deal under its belt, it’s highly likely that Sprint will attempt to acquire the whole thing. This, at least, would give Sprint unfettered access to all of Clearwire’s LTE and WiMax holdings.

In the near term, at least, Sprint will have some room to maneuver. The company can start using its new LTE spectrum as soon as its deals with Clearwire and US Cellular close. In the meantime, the two companies plan to launch a transition process that will lay out the way for Sprint to take over its US Cellular purchase.

But there still needs to be more. Perhaps the only answer for Sprint is to decommission its WiMax service just as it has the old Nextel iDEN network. It will be a drastic step, but one that Sprint can make easily and quickly.


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