Sprint Considering LTE, Merger with T-Mobile

Sprint is reportedly considering adding LTE-based 4G technology on top of Clearwire's WiMax technology, a move that could encourage Deutsche Telekom to acquire Sprint and merge it with T-Mobile.

Sprint Nextel, the first U.S. carrier to roll out a 4G network, is considering changing its 4G strategy in a way that could encourage a merger with T-Mobile, according to a July 12 report from the Financial Times.

Sprint CEO Dan Hesse told FT that Sprint is considering rolling out LTE (long-term evolution) technology alongside its current WiMax 4G offering.

"We have spectrum resources where we could add LTE if we choose to do that, on top of the WiMax network," Hesse told FT. "The beauty of having a lot of spectrum is we have a lot of flexibility."

Deutsche Telekom, the parent company of T-Mobile USA, previously considered purchasing Sprint and merging it with T-Mobile - an effort that would create a larger entity more capable of competing with the iPhone-offering AT&T and the 3G-strong Verizon Wireless. It reportedly decided against the move due to Sprint's WiMax roadmap, which would be at odds with T-Mobile's plan to eventually transition from its HSPA+ technology, said to currently offer 4G-like speeds, to LTE.

Sprint currently offers customers WiMax through Clearwire, which it owns a majority share of. Clearwire recently expanded its WiMax service to the Washington, D.C., and Kansas City areas, and by the end of 2010 it plans to cover more than 120 million people. While competitors Verizon Wireless and AT&T plan to, like T-Mobile, roll out 4G networks using LTE technology - Verizon during the fourth-quarter of 2010 and AT&T beginning in 2011 - Sprint hoped that being first out of the gate, even with a 4G technology expected to ultimately be the less popular of the two, would help to boost subscriber growth.

However, Sprint has yet to see a considerable jump in its subscriber numbers - a situation not helped by the currently short supplies of its first, and newly launched, 4G-capable handset, the HTC Evo 4G.

According to Technology Business Research Analyst Ken Hyers, the rollout of an LTE network would be in keeping with statements Clearwire has made - and would prevent Sprint from being isolated in its technology choice as Verizon and AT&T's 4G networks go live.

"Clearly, the U.S. market cannot support four competitive national operators. T-Mobile currently has the fastest 3G wireless network in the market, but its coverage is smaller than any other major operator, and like Sprint it continues to lose postpaid customers to AT&T and Verizon Wireless," Hyers told eWEEK. "A tie-up between the two smaller nationwide operators would allow them to share spectrum and network-buildout costs, while continuing to operate independently."

Hyers continued, "I believe that a network sharing partnership between Sprint and T-Mobile USA would be an effective way for them to rapidly build a high-speed wireless broadband network while claiming bragging rights to having the biggest and fastest network."

According to FT, were Clearwire to make the transition to LTE, Huawei Technologies, Motorola and Samsung would be likely candidates to supply the parts. (Verizon has chosen Alcatel-Lucent and Ericsson to build out its network.)

For the time being, however, Sprint is still working to make good on its lead, no matter how small, and hopes to release its second 4G-capable smartphone, the Samsung Epic 4G, later this summer.

Editor's Note: This article has been updated to correctly state the number of people Sprint's WiMax service covers. The service covers 120 million people.