Sprint CEO Dan Hesse: Just give us time, and we’ll build the 4G network of your dreams

Sprint(s s) has been talking about building the most powerful mobile broadband network in the country since 2007, but seven years later, it is still far from its goal. As it stands now, Sprint’s 4G network is the slowest in the country, has least amount of coverage in major cities and has the smallest overall capacity.
As I’ve written many times before, Sprint has always had the potential to build the most powerful LTE network in the country, but despite years of promises it has failed to live up that potential. I think it’s quite fair to ask if Sprint really does plan building the mother of all networks or if it’s resigned itself to delivering a run-of-the-mill mobile broadband service.
On Tuesday I got my chance after Sprint’s Q4 earnings call where it reported a $1 billion loss but new subscriber gains. In an interview with CEO Dan Hesse I asked if Sprint still maintained its grand 4G ambitions. Hesse’s answer: “Yes, but it will take us a while to get there.”

Dan Hesse in one of Sprint's commercials. Photo courtesy of Sprint.

Dan Hesse in one of Sprint’s commercials. Photo courtesy of Sprint.

Hesse was perfectly frank about where Sprint currently stands. He said Sprint still had a lot of catching up to get its LTE network into key markets like San Francisco, Seattle and Washington, D.C. and match the 4G speeds of its competitors. But he also pointed out that Sprint has a lot more barriers to overcome than its competitors. While Hesse insisted that Sprint has a “tremendous sense of urgency” to build its network, he added that a project of this scale simply can’t be rushed.

The trials and tribulations of Sprint

“There’s a complexity to this network build that’s never been undertaken, in my view, by anyone in the world,” Hesse said. “We’re playing three-dimensional chess.”
While other carriers are adding LTE as an overlay technology to their networks, Sprint is ripping its old network out, replacing every radio, every base station and every backhaul connection, Hesse said. And while Sprint may have spectrum out the wazoo, it’s not in the most easy-to-reach places. Most of Sprint’s competitors had access to a good 20 MHz of 4G spectrum over which they could build pristine new LTE systems. Sprint has had to stitch airwaves from across the electromagnetic spectrum, Hesse said.
Hesse also pointed out that Sprint has faced its fair share of obstacles. Right as it launched its first Wimax network in 2008 in Baltimore, the country was hit by a deep recession, which hit Sprint particularly hard as it was still hobbled by its ill-advised acquisition of Nextel a few years earlier. Wimax turned out to be the wrong 4G bet, and it was forced to switch to LTE in midstream.
Most recently Sprint has been reeling from subscriber losses after shutting down Nextel’s old iDEN network. Only this last quarter did Sprint start growing again, and even then most of its customer additions came from its virtual network partners, not from Sprint proper. And it still reported a $1 billion loss in the continuing fallout from Nextel’s demise.
Hesse said he wasn’t making excuses, but offering explanations about why its LTE strategy has taken far longer to execute. But now that its big investment deal with SoftBank is closed, Sprint’s finances are in better shape. By taking over complete ownership of Clearwire this summer it’s now in firm control of its 4G airwaves and 4G destiny.
Sprint’s 4G juggernaut won’t suddenly appear overnight, Hesse said, but you will start seeing evidence of it in some cities this year.
“I really can’t give you a magic date because the build will continue through 2015,” Hesse said. “We’re moving on a city by city basis.”

Sprint's nationwide network with LTE in orange and Spark in yellow

Sprint’s nationwide network with LTE in orange and Spark in yellow

Hesse is specifically referring to Sprint’s new Spark network, built on its treasure trove of 2.5 GHz spectrum. Today Spark is only present in 14 markets (Baltimore and Philadelphia came online this week), and it’s really only an average network compared to the new network behemoths T-Mobile(s tmus) and Verizon Wireless(s vz)(s vod) are building. But starting in the second half of the year, Sprint will start piling more frequencies onto Spark.
Using an LTE-Advanced technique called carrier aggregation, Sprint will shape a network with 40 MHz of spectrum, Hesse said, making Spark comparable to the fat pipes T-Mobile and Verizon are laying. Then in 2015 it will aggregate even more airwaves, creating 60 MHz systems that will presumably outpace any network in the field today.
In the process it will fill in the big holes in its current LTE coverage footprint such as San Francisco, Hesse said. While you won’t see blazing speeds in every city in the country, in key markets Sprint’s network will be unequaled, Hesse said. Sprint hasn’t given up its ambition of being the mobile broadband carrier of record in the U.S., he said; it’s merely delayed it.
“This is very much in our DNA,” Hesse said.

More false hope?

Dan Hesse is a very convincing man, but I admit I’m still plenty skeptical. I’ve always rooted for Sprint, but it’s hard to argue with its history.

Sprint's Network Vision involves replacing its network hardware with new base stations that can serve multiple bands including Sprint’s 800 MHz, 1.9 GHz spectrum as well as its 4G 2.5 GHz spectrum and could be configured to one day handle LTE. Photo courtesy of Sprint.

Sprint’s Network Vision involves replacing its network hardware with new base stations that can serve multiple bands including Sprint’s 800 MHz, 1.9 GHz spectrum as well as its 4G 2.5 GHz spectrum and could be configured to one day handle LTE. Photo courtesy of Sprint.

Sprint’s grand systems overhaul — called Network Vision — didn’t just begin last year; it started back in 2011. And while its new Spark network came online last fall, Sprint and Clearwire supposedly started building it in 2012. What’s more despite Hesse’s claim of urgency, I just don’t see it in its announced plans. Spark won’t be complete for three years, and even then it will only be in 100 cities.
Compare that to T-Mobile, which went from zero to nationwide LTE in just eight months. Admittedly T-Mobile’s LTE overlay isn’t quite as complex as Sprint’s complete network replacement, but T-Mobile has still faced many of the same obstacles. It’s had to cobble together airwaves and cannibalize its old 2G spectrum, all the while facing enormous competitive pressure from AT&T(s t) and Verizon Wireless. And within a year of completing its initial LTE rollout, T-Mobile plans to its double its speeds and capacity.
Mobile networking technologies are progressing at a rapid clip. Sprint’s competitors are building up their own spectrum empires, and they’re taking advantage of the same carrier aggregation technologies as Sprint. By the time Sprint’s grand network is actually built it might not be so grand anymore.
Maybe Sprint one day really will build the 4G network of every mobile data junkie’s dreams, but I for one am tired of waiting.