Sprint Announces Initial LTE Markets; Still Trailing Verizon, AT&T

The followers in the Long Term Evolution (LTE) market were active newsmakers this week, first with AT&T’s announcement of new live LTE markets, then with Sprint naming four of the 10 markets it plans to offer LTE in next year. Given that an LTE phone from either AT&T or Sprint is going to be severely limited in its first iterations (due to the limited live markets you could use it in), what is the point of the carriers making LTE noise so far in advance?

Simple — they don’t want to be seen as being left behind when an LTE iPhone comes to the market. While there is no date yet among the Apple rumormongers for such a device, it’s safe to assume one is coming this year — and as our recent 4G LTE MARKET REPORT for January, 2012 notes, the carrier best prepared to service that phone when it arrives is Verizon. To quote our own report:

In 2011, network buildout was the one area where Verizon outperformed even its own goals for 4G LTE, surpassing its original intention to cover 178 markets by bringing live services to more than 190 markets by year’s end. Near the end of the year Verizon also showed it’s planning big things for the future, by announcing plans to spend $3.6 billion to buy a big chunk of wireless spectrum from the top cable companies, a deal that will require government approval.

AT&T, by comparison, was able to only launch LTE services in 15 markets by the end of 2011, putting it well behind Verizon. And at year’s end AT&T’s bold attempt to purchase No. 4 wireless carrier T-Mobile USA was finally scuttled, as regulatory opposition led AT&T and T-Mobile to withdraw their initial merger request from government agencies and then giving up altogether when it became obvious that the companies wouldn’t be able to convince regulators to approve the deal. Leaving aside the political fallout, the scrapped deal has already cost AT&T valuable network buildout time, which might leave it with some fairly big coverage gaps when an LTE iPhone arrives. Sprint, whose current 4G network is live in 71 markets, is even farther behind in the LTE race, with only “plans” to offer LTE services sometime in 2012. Since a 4G iPhone will likely not work on Sprint’s current 4G WiMAX network, like AT&T Sprint needs to build quickly to get as many cities as it can served by LTE by the LTE iPhone ship date.

Verizon, on the other hand, will be supremely prepared for an LTE-capable iPhone, with live networks all across the country, and with network bugs and glitches already behind it. Though Verizon had suffered two system-wide LTE outages during 2011, as well as some problems getting devices like tablets fully configured to connect to the LTE network, by 2012 its learning curve should be advanced significantly while its competitors will just be starting their own education in the running and administration of a faster, data-only network. That leads us to conclude that despite its somewhat pedestrian start in 2011, Verizon’s 4G LTE network should truly come of age in 2012, allowing the company to “Rule the Air” as its advertisements beckon, while its competitors struggle to catch up.

While we noted yesterday that an AT&T LTE phone would be a hard sell, an initial LTE offering from Sprint might be even a tougher device to push, unless — unless — Sprint somehow manages to wedge a WiMAX chip into the device, making it a true 4G hybrid. But while such chips already exist, don’t hold your breath because for 2012 even though Sprint is laying LTE groundwork, its sales strategy is all about the iPhone, which may not be such a dumb move since that is the device customers clearly want, even more so than any 4G offering. While we are going to guess that Sprint may have finally been passed by Verizon in 4G device sales during Q4, that’s not really a surprise as we noted in our report:

The idea that consumers prefer the iPhone, at whatever speed, to a 4G device became so obvious that it led Sprint to basically trash its existing 4G strategy — even though it was selling more 4G phones than Verizon — in favor of paying Apple billions in up-front fees to be able to sell the iPhone on its network.

If you want to give yourself a jump-start on the LTE market madness, buy one of our value-priced reports and get up to speed.

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