As per its previously announced schedule, the third-largest
wireless carrier in the U.S.,
Sprint Nextel Corp.
) recently launched its high-speed 4G Long Term Evolution (LTE)
services in five markets - Atlanta, Dallas, Houston, Kansas City
and San Antonio, along with 11 other towns located around these
Higher proliferation of smartphones and tablets has increased
the demand for much faster network services. So, in order to meet
the increasing subscriber demand as well as to compete with early
Verzion Communications Inc.
), Sprint came up with its first 4G LTE services in the
Sprint plans to successfully deploy its LTE services to cover
its nationwide network by the end of 2013, encompassing more than
250 million customers with 22,000 cell sites. The successful
deployment will not only allow the company to sideline its existing
WiMax Network but will also help it to reduce cost by installing
fewer cell sites.
The development is a part of Sprint's network upgrade plan,
Network Vision, which aims to combine various 3G and 4G
technologies into one seamless network, hence leading to efficient
use of capital, reduction of cell sites, the elimination of dual
networks, backhaul efficiencies, reduced churn, lower roaming
charges and energy cost savings.
On the flipside, we believe that increased investment for the
deployment of LTE networks across the U.S. by 2013 will lead to
dilution of Sprint's free cash flow for the next two years.
However, liquidity is expected to improve once LTE is fully
We are maintaining our long-term Neutral recommendation on
Sprint. For the short term (1-3 months), the stock retains Zacks #3
SPRINT NEXTEL (S): Free Stock Analysis Report
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