Spectrum is a nonrivalrous, excludable good. Like any other wireless carrier, Sprint’s cell towers, cell phones, heck even their customers generate that electromagnetic field we call spectrum. Just like Sprint bids for access to spectrum from the Federal Communications Commission, we “bid”, usually on a monthly basis, for access to Sprint’s cell towers.
Our little hand held radios that we call cell phones and smart phones emit signals that eventually clog the highways and channels we refer to as frequencies. The greater the demand to access spectrum, the greater the cost to use it.
Sprint, like every other carrier, faces not just a spectrum crunch, but a cash crunch. Telling investors that roaming agreements are its best bet to conserving cash should put investors on edge. Also buying 30 million smart phones when your network isn’t ready for all that capacity doesn’t set well with me either.
I also have to wonder how Clearwire’s spectrum squatting is impacting Sprint’s decision to rely more on roaming agreements to service its customers versus building out its network? According to Sprint’s 10-K, Sprint has a wholesale agreement with Clearwire where Sprint resells Clearwire’s 4G service. Maybe Clearwire hasn’t built out to the areas where Sprint is relying on roaming agreements or Clearwire wants more money. I don’t know.
I do know that investing in your network and building it out puts your subscribers at ease. They do care that the carrier who says they are providing national service is the carrier that is actually carrying their national service.