Sprint's iDEN Problem
Sprint is in quite the pickle. Usually companies invest in promising new technology and scale back on those that have run their useful course. Sprint doesn't appear to have that choice with iDEN. It couldn't see expanding the network in the current economic climate, and it can't simply shut it down because of the network's more than 14 million users. So Sprint's forced to make a business of it, announcing last month it will “rejuvenate” the Boost and Nextel services, while securing commitments from Motorola to provide more iDEN phones and network support.
No matter how you look at it, iDEN's useful lifetime is over. As the industry moves from voice to data for future growth, iDEN can't support anything but the most rudimentary data capacities. As the industry further consolidates around standards, iDEN is a proprietary technology made for a mere handful of operators. And as CDMA and UMTS push-to-talk technologies improve, iDEN's primary differentiator is evaporating.
The iDEN network still holds some value to vertical markets and public safety, and a carrier focused on those sectors could definitely get more mileage out of it. Presumably Sprint is looking for ways to prevent the network's value from dropping further while it waits for a buyer to come along. If not, then Sprint has to think about ways to eventually phase out iDEN. Perhaps it should look at when AT&T Wireless and Cingular transitioned from legacy TDMA networks to GSM. The GSM transition took a lot of time and money, but the operators were able to hold on to most of their customers, and the combined AT&T is prospering. By comparison, Sprint's CDMA network already is built; it just has to start transitioning iDEN customers over. A good way to do that would be to stop selling new iDEN phones.
Sprint's 800 MHz re-banding agreement will force it to retune the entire iDEN footprint to new frequencies by 2010, so it will drain investments no matter which direction the carrier goes. The question is how much more can it milk out of iDEN before it inevitably has to give up on it entirely.
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