3 reasons why the iPhone won't help Sprint very much

Sprint still must confront AT&T-T-Mobile deal, need to convert to LTE, and win new customers

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"Sprint has bigger worries with the pending AT&T-T-Mobile merger [than getting an iPhone]," Kagan said. "This device, while good news, won't solve their growing and more serious problems. Because of the proposed merger, Sprint faces a significant uphill battle. They will be a much smaller competitor compared to number one and two."

As of June, Sprint counted about 52 million subscribers, while Verizon had 106 million and AT&T had nearly 99 million. T-Mobile recently had 34 million.

"The combination of AT&T and T-Mobile will be a huge issue for Sprint to overcome," Gold said.

3. Little network gain seen

Depending on which networks the iPhone 5 supports, Sprint is likely to see little network advantage over AT&T and Verizon.

This reason depends on postulations about what networks will or won't be supported by the iPhone 5. In the spring, some rumors surfaced that Sprint would get an iPhone 4S, a variant that could support Sprint's expanding 4G WiMax network or at least Sprint's 3G CDMA network. This week, one unnamed source in the Wall Street Journal said Sprint would get the iPhone 4 as well as the iPhone 5 in mid-October, but there was no mention of whether Sprint's iPhone 4 would be a special iPhone 4S for WiMax 4G or just an iPhone 4 that runs over 3G CDMA, similar to Verizon's iPhone 4.

If there's no speed boost from WiMax for Sprint's iPhone 4, then it doesn't seem like much of an improvement over competitors, analysts noted.

As for the iPhone 5, most analysts don't believe it will support 4G speeds in either Wimax or LTE. (LTE is now deployed by Verizon in 142 cities and by AT&T in a few cities). Gold and Dulaney said its unlikely Apple will build a WiMax-ready iPhone model, and further noted that Sprint doesn't have an LTE network at all, although it announced in July a 15-year deal with LightSquared that gives Sprint the option to buy LTE capacity from LightSquared after Sprint builds wholesale LTE network services for the LTE technology provider.

Given Sprint's network status and the probability the iPhone 5 will still be a 3G phone (possibly able to run over both AT&T's GSM and Verizon's and Sprint's CDMA), Gold said Sprint won't be able to sell itself as a better network alternative over AT&T or Verizon. "I don't think Sprint's carrying the iPhone is a groundbreaking [network] capability for Sprint," Gold concluded.

Dulaney added: "The real problem remains that Sprint's 4G WiMax is a non-mainstream technology and that Apple will not support that, I would be pretty certain. So if you want an iPhone and you want high-speed networks, you will have to go to other networks."

Dulaney said he realized iPhone 5 is not likely to run on LTE, but added that LTE could come to an iPhone 6 or later. An LTE-ready iPhone "is not that far away, in my opinion, and when that happens, Sprint will remain behind. Sprint must convert to LTE and away from WiMax. They will have to do that to ever have a chance of vying for mainstream network leadership in the U.S."

In summary, veteran analysts believe the Sprint iPhone 5 will be great for existing Sprint customers as an upgrade choice, but it is not likely to draw in many customers new to Sprint, which the carrier badly needs. Sprint might wrangle new customers with data pricing deals or giveaways, but it's not likely that its wireless networks will be a lure over those of Verizon or AT&T.

And looming over all these worries is how Sprint fares with regulators who are weighing AT&T's planned takeover of T-Mobile. Selling the iPhone could make Sprint appear stronger from a competitive standpoint, giving regulators more confidence that the merger would not be such a serious blow to Sprint.

With or without the iPhone, the real ongoing concern for Sprint CEO Dan Hesse and his managers is the proposed AT&T-T-Mobile merger and how a distant-third place carrier will remain viable in the U.S. market.

Clarification: This story was changed from when it was originally posted to add information noting that Sprint is the only major U.S. carrier to offer unlimited data plans.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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