Sprint to sell 4G services to wholesale customers
The move is designed to broaden the customer base using its 4G service, which faces competition from the likes of Verizon Wireless.
Sprint Nextel said today that it will begin offering 4G services on a wholesale basis, allowing other companies and smaller carriers to resell a 4G connection to their customers.
As part of the announcement, Sprint said it would offer up the HTC Detail, which is similar to the Evo Shift smartphone, and a Sierra Wireless data card to companies looking to resell 4G services. The company said it plans to offer additional devices to its wholesale customers in the coming months.
The move is designed to broaden the reach and potential customer base for 4G, which is sold through Sprint but powered by a network built and operated by Clearwire. The new arrangement is made possible by an agreement the two companies struck overin April.
"What we're trying to do is equip our partners and take market share," said Sprint representative John Votava.
While Clearwire also offers 4G services on a wholesale basis, Votava said the two aren't competing against each other, since the revenue Sprint generates from its wholesale customers flow back to Clearwire as well. Sprint owns a majority stake in Clearwire, which reports its financial results tomorrow.
The two are looking to expand the adoption of its 4G service, which runs on a technology called WiMax, because it faces rival 4G services offered by the likes of Verizon Wireless. In a little more than half a year, Verizon has surpassed Clearwire in the number of markets covered by its own flavor of 4G, which is built on a technology called LTE. Clearwire, which faces issues with financing, has seen its expansion stall this year with no new markets.
With ample marketing muscle behind Verizon's 4G network, customers are beginning to look at its network over the services offered by Sprint and Clearwire. The speed advantage was one of Sprint's primary advantages in the past, but that has largely faded.
Sprint, meanwhile, can still claim to having the most 4G customers and most available devices, although its lead is shrinking.
Sprint said it previously had one wholesale customer in Mitel, which sold a data card to business customers starting last fall. But with the new arrangement, the carrier hopes to add more wholesale customers. Votava said he expects to announce new partners starting in the next few weeks.
Sprint has traditionally been the most aggressive in utilizing the wholesale model for growth. The company had in the past struck deals with companies using a model known as a mobile virtual network operator, allowing them to resell their 3G service. Virgin Mobile was its best example before Sprint ultimately acquired the prepaid provider.
In the second quarter, Sprint added a net 519,000 wholesale and affiliate customers even as it lost 101,000 contract subscribers.
The announcement comes a few days after Sprint said it would host and help maintain, which will also sell service on a wholesale basis.