Sprint makes WiFi part of “massive densification” program

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“When you massively densify any network, the result that you get when you have so much spectrum is spectacular,” Sprint’s CEO Marcelo Claure said on the US operator’s recent quarterly earnings call. The company is still under intense pressure finally to deliver the promises it has been making to build a super-high capacity network and to use it to reverse the postpaid subscriber losses which have haunted it for years.

Most of those “massive densification” activities have centered, to date, on harnessing Sprint’s plentiful stores of licensed LTE spectrum, particularly in the 2.5 GHz TDD band which housed its Clearwire venture. However, like many operators round the world, Sprint is also increasingly integrating WiFi into its densification efforts, to reduce its total cost of ownership and add to the overall pool of wireless capacity.

Until now, Sprint has been the least active of the US big four in building its own hotspots or partnering with third parties to offload data from its cellular systems. However, it has now signed a multiyear WiFi offload deal with aggregator Boingo Wireless, which will support seamless hand-off between the two networks, enabled by the Passpoint standard, initially at 35 major airports. This is part of Sprint’s stated aim of making WiFi an integral element of its HetNet in future, looking beyond simple offload to integration at the mobile core and a seamless pool of capacity.

Under Sprint’s agreement with Boingo, up to 40m of the carrier’s handsets will be able to auto-authenticate with Boingo hotspots for no extra charge. WiFi usage will not count towards a customer’s monthly service plan. The deal comes after about a year of market trials between the two partners, during which time Boingo has been deploying the WiFi Alliance’s Passpoint technology, which enables seamless authentication, hand-off and security when users move between WiFi networks, or between WiFi and cellular.

In a company blog post, Bye wrote that Sprint sees WiFi as “a complementary fourth layer of our network (the first three layers being our 1.9 GHz, 2.5 GHz, and 800 MHz spectrum bands). By enabling customers to move more smoothly between trusted WiFi and cellular, our customers will have a better mobile experience in more locations, all while lowering their cost of data usage.”

The operator has been more active in WiFi in recent months, supporting WiFi Calling (IMS-based voice over WiFi) on most of its new Android smartphones and iPhones. It also has some WiFi-first options for budget customers – services which default to WiFi and only use cellular capacity when there is no WLAN signal in range.

And this week Sprint launched WiFi Connect, a consumer router that prioritizes Sprint’s own WiFi Calling traffic over any other WiFi transmissions – a clear sign of how cellcos aim to bring the licence-exempt technology under the firm control of their own systems, using their IMS platforms to prioritize their own traffic in preference to that of over-the-top providers, while aiming to deliver a superior user experience to customers than Skype can offer.

The router also includes smart connect technology to assign signals dynamically between 2.4 GHz and 5 GHz bands. It is free to customers with broadband lines and Sprint’s WiFi Calling capability on their smartphones (but is not for sale separately), so is clearly designed to boost uptake of a fully carrier-controlled WiFi/cellular experience, and strike a blow to over-the-top communications.

Sprint is also looking to use WiFi to improve outdoor coverage and capacity in some areas, in conjunction with cellular small base stations. “The current product we are working with for outdoor street level coverage includes WiFi and should be commercially deployed in the near future,” Bye wrote.

Sprint clung on to its position as the US’s third mobile operator in the first quarter of 2015, despite aggressive promotions by T-Mobile. However, the company knows it has to accelerate its efforts to create the high capacity network it has promised for so long, in order to reduce its cost of data delivery and enable differentiated services – the only way to avoid a race to the bottom in a tariff war with TMo.

In its fiscal Q4, Sprint reported a loss of $224m, up from a loss of $151m in the year-ago period, on revenues down to $8.3bn from $8.9bn.

The company is finally nearing the end of its first-wave LTE deployment, and is starting to look at ways to densify its network in order to outdo its rivals in terms of its capacity, and also the cost of that capacity. Its plentiful 2.5 GHz spectrum, acquired with the Clearwire venture, is a major asset since the high frequencies are well suited to capacity-driven roll-outs and small cells, and the licences cost very little, by contrast with the lower frequency, coverage-oriented spectrum in the AWS-3 band, for which Sprint’s main competitors paid huge sums a few months ago.

On the first quarter earnings call with shareholders, Claure said that the company was finalizing plans for a “massive densification” of its network in the 2.5 GHz band. This will be the next step in its Network Vision, but Claure said that the new wave of roll-out would significantly improve Sprint’s TCO, compared to Network Vision.

That, in turn, will give Sprint the elasticity to engage in keen pricing when it wishes, or to continue to offer some all-you-can-eat options, which have proved impossible to support financially for most MNOs. It will also end the long run of customer defections which have been caused by performance glitches during the process of switching over to LTE, adding to the seemingly endless pattern of churn among Sprint’s higher value postpaid customers.

In its fiscal Q4, it still lost a net total of 201,000 postpaid customers, though this was fewer than AT&T, which lost 291,000. Verizon shed 138,000 postpaid users while only TMo grew its postpaid base, with 991,000 net additions. Sprint did better in the lower value prepaid sector, and also in tablets – it added 1.2m customers in the quarter, mainly from these segments. Claure said that, although postpaid churn was down (to 1.84%, from 2.3% in the previous quarter) this was still disappointing, and the metric needed to be improved significantly. This would only be achieved by “fundamentally transforming the customer experience”, he said, which in turn meant transforming the network.

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Caroline has been analyzing and reporting in the hi-tech industries since 1986 and has a huge wealth of experience of technology trends and how they impact on business models. She started her career as a journalist, specializing in enterprise and carrier networks and in silicon technologies. She spent much of her journalistic career at VNU Business Publishing, then Europe’s largest producer of technology publications and information services . She was publishing director for the launch of VNU’s pan-European online content services, and then European editorial director. She then made the move from publishing into technology market analysis and consulting, and in 2002 co-founded Rethink Technology Research with Peter White. Rethink specializes in trends and business models for wireless, converged and quad play operators round the world and the technologies that support them. Caroline’s role is to head up the wireless side of the business, leading the creation of research, newsletters and consulting services focused on mobile platforms and operator models. In this role, she has become a highly recognized authority on 4G systems such as LTE and WiMAX, and a prolific speaker at industry events. Consulting and research clients come from major mobile operators, the wireless supply chain and financial institutions.