Sprint Opens Door to Sticking With WiMAX Longer Than Promised
SANTA CLARA, Calif. -- Sprint is considering selling WiMAX devices beyond its commitment to do so through 2012, as it forges toward the more broadly accepted LTE technology for 4G wireless broadband, CEO Dan Hesse said. Speaking at the Sprint Open Solutions Conference for developers late last week, he didn’t elaborate on the possibility of sticking longer than promised with handsets or other hardware that can use both 3G and WiMAX.
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Sprint has no plans to add devices that support both WiMAX and LTE to the dual-mode CDMA-LTE and CDMA-WiMAX gear that it has announced, Hesse said. But the company wants to give itself “maximum flexibility” in making use of chips that will accommodate the frequency bands of broadband providers such as LightSquared that Sprint makes network-hosting agreements with, he said. His company aims for handoffs between wireless technologies on various bands to take advantage of their differing benefits opportunistically, Hesse said. Sprint’s next steps with 4G partner Clearwire, after a nonbinding agreement on cooperation in developing LTE (CD Oct 27 p8), are working out “a commercial agreement and a handset-technology road map,” he said.
A “great marriage between Apple and Sprint” is destined by their common appreciation of simplicity in technology, which was at the core of Steve Jobs’ genius, Hesse said. “Our cultures align and what we think aligns.” On the carrier’s side, that’s reflected in a $79 monthly unlimited plan for iPhone use, he said.
Hesse showed sensitivity to Wall Street’s rough treatment of the company from the start of his keynote. “I can tell I'm not at a shareholders meeting,” he said after accepting strong applause when he walked on stage. Sprint’s stock price has been “under pressure” because there’s “some concern” over the fact that a network upgrade and subsidies of iPhone sales will be “a big cash drain over the next couple of years” and “we're going to have to go to the market to borrow money,” Hesse said. But “having a great network is just table stakes to being a great wireless company,” he said. The share price bottomed out at $2.22 last month after having hit almost $6 as recently as June. In recent weeks, it has bounced between about $2.50 and $2.90.
Many investors have a short time horizon, and they don’t like the hit coming to Sprint’s earnings the next couple of years, Hesse said. “You can’t run your company based on what Wall Street is looking for next quarter,” he said. “We take a long-term view.”