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Sprint pushes farther into rural America

The carrier is planning new strategic deals with rural operators to compete against AT&T and Verizon anywhere in the US, including the nation's most remote regions.


SAN ANTONIO -- Sprint wants to take its 4G LTE network to every corner of the US. And it has formed two separate initiatives to achieve this goal.

On Thursday, the company will make two announcements that will help it make this ambition a reality. The first thing it's doing is joining the Competitive Carrier Association's Data Roaming Hub, a move CNET reported earlier Wednesday. This partnership will make it easier for Sprint to roam onto rural operators' existing 4G LTE networks.

The second major announcement is that Sprint has formed a strategic partnership with the NetAmerica Alliance, which represents rural operators deploying 4G LTE services, to extend the Sprint 4G LTE network and accelerate the deployment of 4G LTE services in rural markets.

SoftBank CEO and Sprint chairman Masayoshi Son will provide more details Thursday during a speech at the CCA convention here.

Under this new partnership with NetAmerica, Sprint won't be roaming onto rural networks. Instead, it will allow these operators to use its 800MHz and 1900MHz spectrum and leverage its device ecosystem in order to build a 4G LTE wireless network that connects to and operates as an extension of Sprint's own network.

The objective with each of these new programs is to expand the Sprint 4G LTE footprint nationwide. Today, Sprint's network primarily covers large urban centers and some suburbs. But the company has virtually no coverage in the most rural parts of the country. This puts Sprint at a major competitive disadvantage compared with AT&T and Verizon, which do cover rural markets.

Sprint executives acknowledge that Sprint customers expect to have 4G LTE wherever they travel. The CCA Data Roaming Hub and the new relationship with the NetAmerica Alliance will provide this coverage for Sprint customers. And at the same time it will also give rural operators more incentive to build out their own 4G LTE networks since it will provide their customers with access to a national wireless operator with 4G LTE service in all the major US markets.

But Sprint also feels it needs to go beyond straight roaming relationships to get the coverage it needs.

"We have been very busy upgrading our network to 4G LTE," Sprint CTO Stephen Bye said in a press briefing Wednesday to discuss the two announcements. "But we have a need for a national footprint on our 4G LTE network that goes beyond the infrastructure we are deploying with CCA."

Also, as part of these announcements, Sprint said it will begin including radio frequencies in its devices that are compatible with spectrum bands being used by rural operators. He said that starting early next year, some Sprint devices will include 700MHz radio frequency for band 12. This is a frequency that Sprint's network doesn't support. But adding this capability to its devices will allow Sprint customers and subscribers of a rural carrier to access the same networks.

"Sprint doesn't own band 12 spectrum," Bye said. "So putting that frequency band in our devices says we are serious about partnering. It's proof-positive that there is a different way of thinking about building out these networks."

How the NetAmerica Alliance relationship works
Participation in the CCA's data hub will extend Sprint's reach to more rural communities, but its relationship with carriers participating in the NetAmerica Alliance program will give customers of both Sprint and the rural operator a more integrated experience.

The way it will work is that Sprint will provide its unused spectrum in the 800MHz and 1900MHz bands to the rural operators, which can combine that spectrum with their own assets. For many rural operators, this likely means combining it with spectrum acquired in the Federal Communications Commission's 2008 700MHz auction.

The arrangement between Sprint and the NetAmerica carriers is a win-win for Sprint and its rural partners. Many carriers haven't deployed this spectrum yet because they lacked roaming partners and a device ecosystem. Sprint's recent moves will give them access to both.

As for the benefit to Sprint, it gives the carrier access to a much wider 4G LTE footprint without having to spend billions of dollars to build the network. It could cost Sprint about $7 billion to extend its network to the nearly 2.5 million square miles of rural America it currently doesn't cover, said Roger Hutton, CEO and chairman of the NetAmerica Alliance. That cost includes only the actual network build. Sprint already owns a lot of the spectrum in the 800MHz and 1900MHz frequency bands in these regions. As is the case with many large operators, some of Sprint's spectrum licenses in these bands included rural regions the company never had any intention of building a network for.

"Considering that Sprint has spent about $10 billion to build its Network Vision network, which covers a large percentage of the US population, it doesn't make sense to spend that kind of money to cover about 13 percent of the population," Hutton said in an interview.

Through its relationship with the NetAmerica Alliance, Sprint can make that spectrum available to rural operators who will build out the network for them. These operators can combine the spectrum with their own spectrum to provide even more capacity to their customers. And because they are building their networks as extensions of Sprint's network, their customers will also gain access to Sprint's 4G LTE network in urban markets.

Another benefit of this tight integration is that the rural carriers will also have access to the Sprint device ecosystem that is supporting both Sprint's frequency bands as well as the 700MHz sliver of spectrum these rural operators are using.

The program is vaguely similar to Verizon's LTE in Rural America program, which establishes a partnership between Verizon and rural carriers to bring 4G LTE to remote regions of the US. Like the Sprint and NetAmerica deal, these rural operators build the network for Verizon in rural regions in exchange for getting access to Verizon's 4G LTE network in other parts of the country. And Verizon's customers can access 4G LTE in the rural markets.

But CCA President Steve Berry notes there are significant differences between the two programs. One of the biggest differences is that Verizon's LRA program requires that participants use Verizon's 700MHz spectrum. Meanwhile, carriers are prohibited from using any of their own spectrum assets to add capacity to their network.

"Verizon's program offered some rural carriers a path to 4G LTE when there wasn't any other option," Berry said during the press briefing. "But with the Sprint program, carriers can use their own spectrum to add capacity and harmonize their capabilities."

Sprint CTO Bye added that the footprint of Sprint's current network compared with the rural operators' networks is much more complimentary than it is for Verizon and these carriers. In many places, Verizon is competing against rural carriers. Sprint is not.

"We are much more mutually aligned with the rural operators we will be working with," Bye said.

The idea, he said, is to create a bigger 4G LTE ecosystem for everyone.

"The way we see it, a rising tide lifts all boats," he said.