Sprint CEO Dan Hesse at CTIA. Credit: Sidecut Reports
You knew Dan Hesse was taking this chairman of CTIA thing seriously when he showed up in Orlando last week wearing black dress shoes instead of his surfer-casual Vans. But Dan’s plans for another blockbuster CTIA were waylaid by the AT&T-T-Mobile takeover announcement, an industry-shattering news event that put a big stink on Sprint’s plans to show itself as a cellular leader.
Without a doubt, Sprint still had the coolio introduction of the show in the mind-bending HTC EVO 3D phone alongside a true 4G tablet, also from HTC. In its usual cutting-edge hip fashion Sprint paid to slice off a largish amount of the show floor to stage its 3D press event, with a small media stage and a whole bunch of nightclubby couches intermixed with gratutitous food stations and even an open bar serving up martinis just after lunchtime on Tuesday.
But even though media types and regular boothgoers crowded the Sprint stations to get a hands-on demo of the eye-popping 3D phone (you really have to see one to experience the coolness of the device) the whole week felt like AT&T had just set off a big stink-bomb at the Sprint party, because every appearance, every panel session and just about every hallway conversation revolved around the new new question: How the heck will Sprint be able to compete as an incredibly distant No. 3 in the U.S. cellular market?
Hesse, for one, at first tried to dodge the elephant entirely — he didn’t even mention the merger in his convention-opening chairman’s speech Tuesday morning, instead doing his best Steve Largent robotic impersonation with blah blah blah statistics and isn’t the U.S. wireless world wonderful. Thankfully later on in the morning the effervescent TV loudmouth Jim Cramer moderated a panel with Hesse, Verizon Wireless CEO Dan Mead and AT&T Mobility CEO Ralph de la Vega, and Hesse got to take the gloves off just a little bit.
It kind of shows how timid the wireless marketplace is that a G-rated dig from one competitor to another rated as a big zinger among those in the audience. And while Hesse showed a bit of spine during the Cramer-fest by saying he opposed the deal (while Verizon’s Mead seemed to be surprised that people might object to a $39 billion deal that basically eliminated 25 percent of the market competitors), it took until this week for Sprint to formally announce its opposition. But the question now is, who are Sprint’s friends in taking on the mighty AT&T lobbying machinery? And if the deal does go through, how does Sprint compete in a world where its economies of scale are much much smaller than its two chief competitors?
For the short term, the answer is simple — as in Sprint’s Simply Everything Plan, which still is the only cellular service contract that offers a true unlimited data-download package for any way you can connect to Sprint’s Clearwire-powered 4G network. Verizon did recently announce an unlimited data plan for its HTC Thunderbolt smartphone, but that applies only to communications to the phone; using the phone as a mobile hotspot puts you under a $20 per 2 GB additional fee. Sprint’s 4G devices that can act as mobile hotspots — including both the new phone and the new tablet, which are scheduled to be available later this summer — don’t have a hotspot restriction for 4G traffic.
The question for Sprint is, how much longer can the company keep signing up folks to truly unlimited plans — and will it be long enough to stave off the surge of 4G LTE phones and tablets Verizon is expected to introduce this summer, along with some similar LTE devices from AT&T? Though Sprint’s Clearwire-powered network is still the 4G leader in terms of deployed markets and coverage/throughput, the early reviews of Verizon’s Thunderbolt are showing it a worthy competitor, especially so if Verizon sticks with the unlimited plan for the near future.
On the back end, 2011 will be a year of more big choices for Sprint, as the company decides exactly what the radio mix will be in its network of the future — more WiMAX or LTE on the Clearwire/Sprint spectrum hoard at 2.5 GHz, or LTE on refarmed frequencies like its 800 MHz holdings? Or a lease of LTE space from the wild card LightSquared? Or a merger or purchase of a smaller competitor, like MetroPCS, to give Sprint more heft when it negotiates with device manufacturers?
All these questions are big ones that won’t go away soon, and the faster Sprint answers them the better for the No. 3 cellular carrier. For right now Sprint may still be the 4G leader, but it’s not a title that Big Yellow can rest upon.