Sprint to Increase iDEN Focus
Sprint said Wednesday that it’s committed to the Nextel push-to-talk network, but some analysts have doubts. “Nextel Direct Connect provides a differentiated experience for our customers,” CEO Dan Hesse said. “The Nextel National Network (iDEN) is key to delivering Nextel Direct Connect. Sprint has invested significantly during the past two years and the network is performing at best-ever levels. Customers can expect to see continued investment and the introduction of new handsets to utilize the network’s unique capabilities.”
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Sprint will “focus on enhancing Nextel Direct Connect in 2008,” it said. That includes more aggressive marketing and adding features and functionality to push-to-talk. As an example, Sprint cited plans to combine push-to-talk with Sprint Mobile Broadband data capabilities, it said. “These efforts are expected to ultimately deliver robust capabilities such as ‘push-to-x’ which can include push to instantly send a text message or send an image, push-to-information and other enhanced features in the future,” it said.
Sprint is trying to slow heavy iDEN customer loss since the Nextel merger, said GimmeCredit analyst Dave Novosel in an interview. But network fixes won’t make operating “duplicate networks” less of a burden, he said. Pali Research agreed in a note. “Sprint might be best served in selling the iDEN network and packaging that sale with its 2.5 GHz spectrum,” it said.
Affirming iDEN support doesn’t mean Sprint plans to spend more on the Nextel network, Jefferies analyst Jonathan Schildkraut told us. “I'm sorry, but there’s nothing Sprint can say or do to make me believe in five years it will be operating iDEN,” he said. As Sprint moves through 800 MHz rebanding, it will spend less on iDEN, he said. But the carrier has far to go on rebanding, and meantime doesn’t want to “disenfranchise” its iDEN base, he said.
More aggressive iDEN marketing is “a step in the right direction, Novosel said. Pali Research agreed. Part of previous management’s “poor execution included a lack of focus and advertising on the iDEN product,” the analyst firm said. “We expect that to change at Sprint in 2008.” Schildkraut is skeptical of the marketing push, coming as it does after an announcement that 125 Sprint stores will close (CD Jan 22 p5).
The news release didn’t mention QChat, the CDMA-based push-to-talk successor Sprint planned for early 2008 release. QChat might not be “ready for prime time,” Schildkraut said. Pali Research also noted the absence. A delay “could be contributing to this reemphasis on iDEN,” the analyst firm said. QChat is on schedule, a Sprint spokeswoman said. The release didn’t specify, but the new features announced for Nextel Direct Connect are for the CDMA flavor, she said.
If QChat is delayed, the reason may be a Santa Ana district court injunction against Qualcomm (CD Jan 3 p1), said Stifel Nicolaus analyst Rebecca Arbogast. “The push-to-talk VoIP patent used in QChat was one of the patents that Judge Selna included in his ’sunset’ provision, allowing Qualcomm to continue to use the technology, but subject to paying Broadcom royalties,” she said. “Qualcomm and Broadcom were supposed to negotiate a royalty for the QChat technology, and it’s possible that this has put a cloud over the rollout of QChat, even though the injunction won’t be issued until January 2009.” Or Sprint might just be “holding back for the time being while it sorts out its larger strategic decisions,” she said.
Sprint said iDEN network quality is improving, citing internal data. At the end of 2007, the network showed double-digit percent improvement year-over-year for dropped and blocked calls, it said. Customer issues related to service fell more than 60 percent since Dec. 2006, it added.