Early last year, Sprint and Clearwire joined forces to begin building the first 4G network in the United States. Separately, neither company could afford to take on the enormous project, and even together, they still lacked the means to complete it. They formed a third company just for the purpose of building the network, and then found investors. Not just any investors—investors with very deep pockets. Three cable companies—Comcast, Time Warner, and Bright House Networks—and two tech companies—Google and Intel—opened those deep pockets and put a combined $3.2 billion into the new company. At the time, it looked like Sprint and Clearwire’s joint venture was going to beat the other major wireless carriers to the punch by at least a couple of years, and they’re still on target for their original goals, including launching 4G capability in 10 new markets this week. But it may not be enough to save either Sprint or Clearwire from their current financial woes.
The Sprint/Clearwire project is building its 4G network using WiMax, which is an IP technology able to provide service to entire cities at more than five times the speed of 3G networks. Sprint and Clearwire had to make some sacrifices to embark on their project, but they deemed the sacrifices minimal compared to what they would gain.
The jointly built 4G network just expanded into ten new markets—Dallas/Fort Worth, and Raleigh, Durham, Charlotte, Chapel Hill, Greensboro, Winston-Salem, Cary, and High Point, all in North Carolina. The network is now available in 25 metropolitan areas total, including Las Vegas, Philadelphia, and Atlanta. Sprint said it expects the service to reach Honolulu, Maui, Seattle, and Tacoma by early December, and to have coverage in a total of 80 markets by the end of the year.
While Sprint and Clearwire did get a jump on the other carriers, and are currently ahead of the game, AT&T and Verizon are both in the process of building their own 4G networks, and it won’t take them long to catch up, and most likely surpass Sprint.
Verizon and AT&T, the number one and two wireless carriers in the U.S., respectively, are building their 4G networks using a different IP technology called Long Term Evolution, or LTE. Verizon is on schedule to deploy its LTE 4G network next year in about 30 markets. It also expects to be able to offer nationwide coverage by the end of 2013. AT&T plans to begin trials of its 4G network in 2010, and launch the network the following year.
Sprint and Clearwire have their work cut out for them. If they want to maintain the current edge they have over the other carriers, they need to step things up quite a bit.
With so many new smartphones coming out, more and more people will be abandoning their regular phones for increased functionality and features that are best served by a faster network. Sprint’s vice president of 4G says going from 3G to 4G is “like going from dial-up to broadband.” An attractive selling point indeed.
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