Broadband Price Wars and Sprint's 4G Advantage Slipping Away

One of the big stories this week was the announcement/launch of VirginMobile's $40 pay-as-you-go, unlimited mobile broadband plan. Sprint owns Virgin (in the US) so it's the same 3G/4G network being powered by Clearwire.

Hands down this is the best of the mobile broadband plans, because it's the cheapest (other than tethering) and most flexible. Depending on how popular this becomes other carriers in the US will be forced to answer.

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The 4G network behind the offering, however, is not that impressive to me.

I'm a Sprint customer and I've now experienced it in several markets with very mixed results. It has not been noticeably faster than 3G; in fact I haven't really noticed it at all. This past two days I was in Dallas at a Directory Assistance conference and I kept getting notifications that Sprint's 4G network was available. Yet it kept playing peek-a-boo and I never saw the benefit of increased speeds. It never "held."

I had a similar experience earlier this summer in Seattle.

Sprint has touted its 4G network as the first in the US (it is, though not technically 4G) and as a major competitive advantage (it's not). Soon Verizon will have an LTE network and AT&T will follow at some point. Sprint has not been able to translate its 4G network claims into new subscribers so far. What has helped Sprint more is a better selection of mostly Android handsets. 

T-Mobile, as I'm sure you've read, is seeking to invest in Clearwire to get access to the network. (Sprint owns 54% and is divided about whether to allow a direct competitor to gain access.) Clearwire needs the money, however, to keep building out its network. According to the Wall Street Journal:

Sprint's board of directors is debating whether to let rival cellphone operator T-Mobile USA invest in Clearwire, three people familiar with the situation said . . . Sprint has the lead now with the country's only 4G network via Clearwire, which can offer speedy Web surfing and stream videos to smartphones and other devices. But it will face competition later this year from industry leader Verizon Wireless and next year from AT&T Inc.

To stay ahead, Clearwire needs billions of dollars in funding, which would enable it to expand from its current base of 49 cities to the country as a whole. The company must also decide whether to stick with its current technology, or switch to a standard that has been adopted by Verizon and AT&T

Notwithstanding the company's ambivalence, Sprint can't simply block T-Mobile because of board voting rules in this specific case apparently. Sprint should just allow T-Mobile to invest to speed the build out of the network. Sprint is not going to gain new subscribers by trumpeting it's network speed and if it delays or hesitates Verizon will quickly pass it and Sprint's network claims will be meaningless.

Sprint needs to compete on handset selection, service and pricing instead.