Case Study - Rolling Out Its 4G Network, Sprint Corporation Competes with Rivals

Sprint, AT&T, Verizon, and T-Mobile play leapfrog as they upgrade their networks with new technologies that offer faster speeds, more bandwidth, and better coverage for mobile smartphones. However, Sprint has lagged behind both Verizon and AT&T and faces strong headwinds in this market.

Sprint initially invested heavily in a technology called WiMax, pinning its strategy to an early-to-market advantage with the nations first 4G offering. However, WiMax is slower than 4G services based on a different technology called LTE (long-term evolution), used by Verizon and others. Sprint is phasing out its WiMax networks, but its LTE rollout lags behind its rivals.

To attract customers, Sprint must provide incentives. The company offers significant discounts and will also pay for any switching fees a new customer might incur. Customers also want faster, reliable service and coverage in more geographic areas. For Sprint, that means installing the towers and transmission equipment that will send and receive the wireless signals in addition to converting to the LTE network.

Before installing 4G antennas, the company has to identify the sites that will provide the best coverage for the area. For cities with tall buildings, large bodies of water, many hills and valleys, and high foliage, those choices are engineering brainteasers. In New York City, for instance, the urban canyons create dead spots that cause coverage problems. Sprint Nextel needs thousands of sites to provide adequate service.

Once sites are identified, Sprint must navigate a labyrinth of government agencies, local building codes, citizens groups, and landowners to obtain approvals. In San Francisco, multiple bureaucracies may be involved, depending on the towers location. The company may need approval from the California Coastal Commission for sites near the ocean or from the California Department of Transportation. Municipalities may also compete with one another for towers because they are a source of revenue, or they might insist they be constructed on city-owned property.

Some community and homeowner associations may also protest tower construction. Although Californians want 4G, they may value neighborhood aesthetics even more. The Not in My Back Yard (NIMBY) mentality further delays rollouts. Carriers deal with this human element by hiding their towers in church steeples or masking their appearance in other ways. Some are built to resemble trees (Figure 3-30). Sprint is widely known for its green environmental initiatives, and the tree-shaped towers support those corporate goals.

Some communities welcome the towers because of the revenue they will earn. For example, a struggling school district in California began negotiating with cell-phone companies to see which one would offer the best deal. Some citizens objected because of possible health risks from radiation, but researchers point out that radiation from the handsets is a much larger risk factor. In fact, handset radiation drops as the number of towers increases because less power is needed to connect.

Despite all these hurdles, Sprint is making progress and continues to expand coverage. The portion of the wireless spectrum that Sprint controls requires more cell sites because the signals dont cover as much territory, but it also offers greater data capacitysomething that customers who use a lot of data will appreciate. Step by step, Sprint is jumping through all the hoops to regain lost customers and compete with rivals.

QUESTION - What is the relationship between physical infrastructure and services as described in this case study? What is the relationship between regulatory considerations and wireless services?