It's Now or Never, Sprint!

Sprint Nextel (NYSE: S  ) had better step on the accelerator, stat! The mobile network provider's biggest competitive advantage is going up in smoke soon.

The 800-pound telecom gorilla Verizon (NYSE: VZ  ) plans to open 4G data networking service in 38 metro areas and 60 airports by the end of 2010. That initial rollout would cover as many as 100 million Americans while Sprint's 4G partnership with ClearWire (Nasdaq: CLWR  ) is advertised as covering a mere 40 million consumers today, though the company has previously stated its goal is to cover 120 million consumers by the end of 2010. Moreover, Sprint tells you to expect average download speeds in the 3-6 megabits per second range but Verizon aims for 5-12 mbps "in real-world, loaded network environments." Sprint's early-bird advantage is going up in smoke.

AT&T (NYSE: T  ) is not far behind Verizon in its 4G plans, while Deutsche Telekom subsidiary T-Mobile is touting its intermediary HSPA+ solution instead, offering near-4G speeds albeit on a less efficient 3G-class infrastructure that will cost more to operate in the long term and cannot be upgraded nearly as far as the LTE and WiMAX 4G solutions.

If Sprint wants to make hay while there's hay to be made, the time to nitro-boost its marketing programs would be right now. Sprint already has two 4G-capable smartphones on store shelves today in the Samsung Epic 4G and HTC EVO 4G. Verizon will need to hit up its favorite partners, HTC, Motorola (NYSE: MOT  ) , and Samsung, for 4G hardware even if the networks are ready for liftoff.

Make a land grab now or forever hold your peace, Sprint. Once the bigger boys invade your 4G turf, you'll have to sell your services on pricing and the lack of irksome data plan caps instead, which seems to be a much less profitable way to go than the soon-to-be-obsolete "fastest network" message.

Follow the high telecom drama by adding Sprint, Verizon, or any other stock to My Watchlist.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Sprint Nextel is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


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  • Report this Comment On October 07, 2010, at 8:53 PM, conradsands wrote:

    Verizon and AT&T = The Most Expensive Wireless Calling Plans in America

    Wireless Profit Margins:

    Verizon Wireless = 45 percent

    AT&T = 39 percent

    Now we know where Verizon (the 10th leading U.S. lobbyist) and AT&T (the 12th leading U.S. lobbyist) get all that money to run commercials 24x7, pay out huge “fat cat” executive bonuses and hire armies of lawyers and lobbyists -- the American consumer.

  • Report this Comment On October 07, 2010, at 8:54 PM, conradsands wrote:

    From ABC News …

    Verizon Wireless to Pay Back Customers for Accidental Data Fees

    More than a year ago, Teresa Dixon Murray says she started to feel something wasn't right about her family's Verizon Wireless cell phone bill.

    "I was getting $1.99 charges on usually two out of my three accounts," said Murray, a reporter with the Cleveland Plain Dealer and the mother of two teenagers with cell phones.

    She said that her family was being charged for Internet use but no one was using the Internet. The mystery charge even appeared, she said, when one of her sons' phones was locked away after he'd lost phone privileges.

    "I knew absolutely, positively for sure. No accidents. No excuses, that this was wrong," she said. "And I was absolutely livid.”

    After months of complaining to Verizon, Murray wrote a newspaper column. After that, she got the company's red carpet treatment and her money back. Her situation was settled -- but thousands wrote to her saying that they'd had the same problem.

    Now thanks to a Federal Communications Commission investigation into Verizon Wireless, some of those customers could see credits of $2 to $6 on their October or November bills.

    Last year, the FCC questioned Verizon Wireless about a $1.99-a-megabyte data access fee that had appeared on the bills of customers who didn't have data plans but who had accidentally initiated data or Web access by pressing a button on their phones.

    Verizon Wireless said that it had stopped charging such fees when a customer started using a data service and then shut it off quickly. It blamed the continued overcharging on a software glitch and has agreed to pay up to $90 million in refunds to affected consumers.

    The FCC said Sunday that it had been examining the charges after consumers' complaints.

    "We're gratified to see Verizon agree to finally repay its customers," FCC Enforcement Bureau Chief Michele Ellison said in a statement.

    "The carriers have 50 [million], 60 [million] or 90 million customers and they charge everybody every month a few extra bucks," said Ed Finegold, Validas' chief analytics officer. "That adds up to billions in profits for them, so they have every incentive in the world to do it."

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