Sprint 4G Zipping Through America

Sprint Nextel (S) officially launched its 4G wireless broadband services yesterday, In line with expectations, in the markets of Atlanta, Las Vegas and Portland. This represents a significant expansion initiative by the third-largest US wireless carrier. The company’s 4G service is being offered under the “Sprint 4G” brand and leverages the WiMax (a mobile broadband technology) network operated by Clearwire Corp. (CLWR).

Subscribers to Sprint’s 4G services across these new markets can now enjoy lightning fast mobile broadband experience by paying just $10 million over their existing 3G wireless data plans. This is enabled by the nation’s first dual-mode (operates on both 3G and 4G networks) mobile broadband modem which was launched by the company last December. The 4G WiMax network offers network speeds that are 3-5 times faster than the existing 3G deployments.

Sprint is leading the 4G wave in the U.S. with aggressive network-deployment plans through 2010. It became the first national carrier to launch a commercial service in Baltimore last October. The company plans to expand in 17 other US cities in 2009, thereby covering at least 25 markets by the end of the year.

While Sprint’s 4G WiMax is expected to play a critical role in its survival in the wireless market, its leadership in 4G is being threatened by the aggressive deployment plans of major peers. Verizon (VZ), for example, recently commenced 4G trials in Boston and Seattle and is scheduled to launch commercial services in early 2010 (as opposed to mid-to-late 2010).

We believe Sprint’s WiMax network will be significantly challenged next year by Verizon’s 4G deployments in overlapping markets. This is because Verizon’s 4G network, based on the Long-Term Evaluation (LTE) wireless broadband technology, has demonstrated better speeds in technical trials than WiMax. Moreover, the other Tier-1 wireless carrier AT&T (T) is expected to commence 4G LTE trials in 2010, thereby heating up competition further.

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