Sprint acting more like a regional carrier

Sprint and AT&T are at it again. AT&T is calling out Sprint on the Kansas City-based carrier’s use of roaming agreements versus building out a network to provide consumers with real facility-based services. Sprint alleges this is good for consumers because the practice allows the company to provide its nationwide service..

Sprint calls this good for consumers? When a consumer purchases the service of a national carrier, the consumer wants the certainty of knowing that her service is being provided point to point by the network of the wireless carrier to whom the consumer forks over its money. What Sprint is doing inefficiently pricing its services if that is the case.

Worse yet, this may also be indicative of Sprint’s continuous poor management; buying 30 million iPhones it apparently can’t build a network out to service the phones on. Hard to believe the FCC considers what Sprint is doing as optimal use of a scarce resource.

Is it really good for consumers and investors that a wireless carrier of Sprint’s size and stature is mismanaging itself into becoming a regional carrier?

A great post (as usual) from the crew at The Motley Fool describing T-Mobile’s preference for a little Federal Communications Commission interference in auctions. T-Mobile would like the FCC to be able to manage the auction of broadcast station spectrum in a way that allows the regulatory agency to determine who would be eligible to bid on spectrum. In short, under a preferred FCC scheme, the FCC could tell Verizon or AT&T to go away.
It sounds like the FCC would like to determine a new class of eligible or designated entities; a class that does not include large players like AT&T and Verizon.

If there are any changes in the rules, the changes should be made to strengthen and make clear the word “competitive”. Competitive means being able to take your capital and leveraging and moving it to activities that provide it the highest returns.

The FCC should be leveraging its authority to grant access to spectrum the same way. It should ensure that any technically proficient carrier be able to bid for and receive a license to provide wireless services.

Discriminating against wireless carriers that happen to be owned by landline carriers (an approach Sprint seems to endorse) should not be a policy that the FCC promotes.

An article posted on Broadband Convergence’s website discusses the downside of a split between cable and Sprint. Seems like Sprint will not be playing in the same sandbox that Verizon, Time Warner, and Comcast are playing in. That box that will see Verizon marketing the cable companies’ video programming services in exchange for Verizon obtaining spectrum licenses from a partnership created by the cable companies.

Sprint, according to the article, runs the risk of being relegated to a regional wireless carrier. It doesn’t have the footprint needed to be a promoter of the cablers’ video programming services, which is why Verizon won out in the spectrum deal.

Personally I believe that Sprint blew its wad trying to fight the AT&T merger. Unfortunately for Sprint, consolidation still rules the air. (I know. Sounds like a cheesy Verizon plug.)

Sprint may get what it feared the most: mediocrity and duopoly compliments of its failure to hold on to its land line business (divestiture showed lack of foresight by them and the FCC) and poor management. Tough …

The Wall Street Journal today is reporting that Sprint has filed a suit to block the acquisition of T-Mobile USA by AT&T, Inc.

Interesting. Why is Sprint, which now has to meet a measurable standard of preponderance of evidence, putting its argument out there for attack? Why risk having AT&T make a case with evidence it will glean from discovery that Sprint may not suffer as a competitor after the acquisition?

Gramercy Capital’s Joan Lappin contributed a short and insightful piece on Clearwire’s inventory of spectrum. The piece, “Everybody Covets that Clearwire Spectrum”, appeard on Forbes.com. While Ms. Lappin does not support the proposed acquisition of T-Mobile by AT&T, she raises an interesting point about Clearwire and one of its owners, Sprint.

“AT&T has made its case to buy T Mobile as one in which the combination of the two would provide T with badly needed spectrum. But if both companies are capacity constrained, it is hard to see how that computes. In round numbers, Clearwire has more spectrum than the combined ATT and T Mo will have if that deal is allowed to fly. (I vigorously oppose the deal on anti-trust grounds because if approved as it will result in a duopoly in the U.S. sending cellular prices much higher.)

Even as it has been starved for cash and had to suspend its own 4G buildout this year, Clearwire’s top management has known all along that it must “evolve” away from the WiMax offering it now has to 4G LTE.

It ran a test in Phoenix some months ago that was wildly successful in speed. It said on its recent conference call that for $600 million it can transition its network to LTE (Long Term Evolution TDD) by overlaying what it has already built. What I don’t understand is why it would take a year to do that as described on their conference call.

If you send the workers out into the field to do a software upgrade and swap out a few line cards, I’m not sure why that takes a year but whatever. Sprint is talking billions to build its own LTE network. HELLO. Why would you do that when you already own half of Clearwire and far less than a billion would do to complete a national build? Makes no sense to me.

Remember that the only part of Sprint’s business that is growing and not shriveling away is the 4G part which is carried on the Clearwire network. In the meanwhile, the geniuses at Sprint are wasting time talking to LightSquared which has no money and it isn’t clear has any frequency either. “

While I disagree with Ms. Lappin on the merger, I agree that Sprint is not making any sense. According their vice-president for government affairs, John Taylor, AT&T is being disingenuous about its decision not to spend $3.8 billion to expand its network.

As I stated in an earlier post, AT&T exercised its good business judgment to pursue a plan that involves not only buying hard facilities, but also T-Mobile’s customers. While Sprint, like any other opponent to the acquisition, is entitled to their position, is it really in the public interest for the Federal Communications Commission or the U.S. Department of Justice to give weight to arguments of a carrier that is apparently, in my opinion and the opinion of a number of analysts, struggling to make good business decisions of its own?