Are we witnessing the resurgence of Sprint?

Sprint (NYSE:S) has been the wireless industry’s whipping boy for the last several years, and for good reason. Ever since its acquisition of Nextel, Sprint has been on a steady path of decline. It’s shed customers and reported a steady stream of losses. Its once vaunted 4G strategy stalled as it outsourced its mobile broadband network to Clearwire (NASDAQ:CLWR) and watched the WiMAX ecosystem collapse in the face of long-term evolution’s (LTE’s) inevitable advance. Meanwhile its two largest competitors AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ, NYSE:VOD), have grown at a phenomenal pace, spearheading the mobile broadband revolution Sprint intended to lead.

But Sprint may be turning the corner. In the first quarter, Sprint reported 1.1 million net additions and saw big gains in postpaid subscriber revenues (CP: Sprint ARPU jumps—is WiMAX the reason?). Sprint finally seems set to be putting its network issues to rest. All signs point to the announcement of a major LTE deployment, using Clearwire’s copious spectrum and Sprint’s new radio-agnostic Network Vision architecture to build the mother of all mobile broadband networks (CP: Clearwire hints at LTE build with Sprint). Sprint has even found its voice on the political stage, lobbying hard to stop AT&T’s proposed $39 billion acquisition of T-Mobile USA (CP: Sprint’s Hesse weighs in on AT&T-T-Mobile deal).

A single impressive quarter, a new network strategy and an elevated political profile themselves don’t mark any great rejuvenation for Sprint, but taken together they offer a glimpse of a new strategy that could turn Sprint into the competitive antithesis of its larger rivals.

Once considered the operator for enterprise and business, Sprint is scaling down rapidly to become a value operator among premium-priced piers. Those 1.1 million net adds in Q1 were all prepaid subscribers, making it one of the only operators to sustain growth on the low-end while prepaid customers flee to budget regional carriers. If AT&T swallows T-Mobile whole, Sprint’s primary national competitor on the prepaid side disappears, which would cement Sprint’s role as the low-cost alternative to the two giant operators.

Data is considered a premium service--a cure for the dwindling margins of voice--but Sprint may be positioning itself to be the low-cost provider of mobile broadband services. If Clearwire and Sprint do announce a nationwide LTE build this summer, they’ll be in an enviable position. Clearwire has more than 100 MHz at 2.5 GHz across the country and 120 MHz in key metro markets. Even discounting the 30 MHz Clearwire has used to build its WiMAX network, the two operators could build an LTE network with far greater capacity than any of its rivals field without cannibalizing their 2G and 3G spectrum.

If the rumors of a Sprint-LightSquared network sharing deal are true, Sprint would gain access to another 59 MHz of spectrum. That would give Sprint a potential LTE network with more capacity than any of the other operators’ 2G, 3G and 4G networks combined.

Sprint would have to share that capacity with Clearwire and LightSquared’s wholesale customers and Clearwire’s own retail operations, but they’d also share capital expenditures, operational costs and possibly even some of those wholesale revenues. So Sprint not only could offer the most robust mobile broadband network in the country it could offer that network the most cost-effectively.

In short, Sprint can offer cheap data and gobs of it, while its competitors will be constrained not just by higher costs but much more limited capacity as their initial LTE carriers are gobbled up by the data-hungry public. Sprint would be able to continue to offer unlimited smartphone data plans—and possibly even unlimited broadband connectivity plans--long after its competitors have thrown in the towel.