Last week, one analyst brought up a potential scenario for Sprint Nextel (NYSE: S) that could "bring the company to its knees."
Craig Moffett of Bernstein Research laid out a nightmare vision in which "some combination" of the mobile carrier's $15.5 billion multiyear iPhone contract with Apple (Nasdaq: AAPL), "a hobbled 4G offering, and a stupendous debt burden," exacerbated by Apple introducing a 4G LTE-capable version of the iPhone before Sprint's own LTE network is operational, makes the possibility of bankruptcy "a very legitimate risk."
Just hold on a minute
Not so, said Sprint CFO Joe Euteneuer. "We will not be disadvantaged," he said, referring to the rumors that Sprint would not get the LTE iPhone when Verizon (NYSE: VZ) and AT&T (NYSE: T) did. He said at a Barclays Capital investors' conference this week that Sprint had the same contract with Apple as both Verizon and AT&T.
More to Moffett's point, Euteneuer said that if Apple does launch its next phone in the fall of this year, the same time of year that Apple launched its iPhone 4S (refusing to say whether or not the next phone would be LTE-capable), Sprint would, by then, have its LTE network up and running and able to cover between 100 million and 120 million people in all of the major U.S. markets.
"If you make the assumption that they launch a device at a similar time that they did last year, [Sprint is] basically done with the [4G LTE buildout in the] major markets," he said. However, Sprint's plans include only having its LTE network available in six markets at the time of that network's anticipated launch this summer.
When it comes to spectrum, Euteneuer told the Barclays audience that Clearwire (Nasdaq: CLWR) will be able to provide enough to meet Sprint's needs for the next four years. He also said that the speed of Sprint's LTE network will be equal to the speeds from Verizon and AT&T even though his company has less spectrum than the two giants. "The speed will be comparable because they are double our size," he said. (I added the emphasis.) He explained that seeming contradiction by adding that more subscribers means a need for more spectrum.
The 4G LTE iElephant in the room
Euteneuer did make a good attempt at quelling the groundswell of nervousness over Sprint's future. But his favorable spin couldn't completely push aside the realization that since Apple rolled out its 4G LTE iPad earlier this month, a 4G LTE iPhone can't be that far behind.
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