Sunday, October 16, 2011

LUS & Sprint Teaser...

LUS Fiber and Sprint —"There's something happening here. What it is ain't exactly clear." (With apologies to Buffalo Springfield)
"LUS Fiber and Sprint representatives will make a major announcement concerning the development of a unique partnership."
"LUS Fiber makes ground-breaking strides toward delivering upon its mission of creating tomorrow’s essential broadband infrastructure while advancing today’s telecommunications services."
That's from an LUS Fiber PR teaser; I'd read it as being an embargoed invite to reporters but the Advertiser apparently judges otherwise...and, I admit, the story makes a damn good mystery and something to idly speculate about over the Festivals Acadiens et Creoles weekend.

So what's up with that? What could the nation's third largest cellular network being doing with LUS Fiber that would be "unique" and "ground-breaking?" Now right up front let me say I don't know. And I'll be eager to attend the Monday event to find out. But in the interim we can wonder and even hope a little.

Some (skippable) background on Sprint...National & Local
Sprint has interesting issues: Sprint may be a huge company but it definitely is not in the same league with sector leaders Verizon and AT&T. Those corporations—with 106 and 99 million subscribers respectively—far outpace Sprint's 52 million. T-Mobile is the only other national carrier these days and AT&T is engaged in a concerted effort to buy its perhaps 31 million subscribers. Should that buyout succeed it would leave Sprint in a distant third place at the back of the pack—and falling further behind each quarter. The company's troubles can be traced in part to an attempt to incorporate Nextel, an attempt which ended badly with Sprint unable to absorb either the very different technical network or the Nextel's very different community of users. Sprint tried to break back into the top tier with an abortive stab at building an advanced network based on WiMax but has recently abandoned that effort and restructured its 4G effort around the LTE standard already endorsed by AT&T and Verizon. Most recently Sprint made a splash when the Apple iPhone 4S launched added it as the third US carrier to resell the popular phone. But the cost of the iphone deal, combined with a solid commitment to actually investing in an accelerated LTE buildout has lead to a precipitous drop in the stock and threats to the continued reign of the CEO.

Take-away: Sprint is a huge company with enormous resources that has demonstrated both a need for and a willingness to take unconventional risks. Some of those unconventional positions reflect its ability and willingness to break with its larger wireless brethren. It took itself out of the landline business, so unlike Verizon or AT&T it does not have a "bastion" in one area of the country where it is the clearly the dominant phone company—and it does not have any area in which it has a deep penetration copper/wired network to feed its wireless towers cheaply. Also, Sprint has also been much more willing to resell its network to what are known as MVNOs — companies which use its network and resell a rebranded service possibly because there is no region of the country in which it it would be giving away the ability to "rob" its own landlines without creating a corresponding benefit to its wireless division.

Sprint & Cox: All that might suggest that if any of the cell phone companies might be willing to partnership with the definitely small and "unconventional" LUS it would be Sprint. But, and it's a big but: Sprint's biggest MVNO appears to be Cox Communications. This is a long-standing association which reaches back five years to a time when a partnership of the largest cable companies had reached a deal to converge technologies in the wireless space with an eye toward developing handsets as targets for video. The vision that animated that partnership faltered and Cox was the first big defection. It declared that it was building its own national cellular wireless network, was going to use LTE, and proceeded to invest in expensive spectrum (including significant spectrum in an arc between Lafayette, through Baton Rouge and into New Orleans). Lafayette's partisans have always thought Sprint our best hope for a wireless partner to give a local fiber fueled wireless network national reach.

Sprint's North American Backbone
(click to enlarge)
Sprint & LUS: While it's true that Sprint's alliance with cable companies has always seemed to stand in the way of an partnership with Lafayette it is also true that Sprint has shown LUS Fiber some sympathy—Sprint's fancy Fiber-Optic promotional van appeared 3 times in Lafayette during the referendum fight and served to introduce local citizens to the idea and to serve notice that a major national corporation took fiber-optics seriously. Sprint is also a Tier 1 internet backbone provider (meaning it is a major player) and has fiber backbone assets that run through Lafayette.)

Soooo......
Where does all that get us? A lot of possibilities.
  • The most obvious, and most interesting is some sort of wireless play. But even that has ranges of possibility. 
    • In one scenario LUS becomes an MVNO, offers Sprint service under its own label complete with national roaming. Lafayette gets out in front of the coming "quadruple play" and offers its customers Video, Wired Internet, Phone, and now Cellular telecomm services. (LUS building its own WiFi data network has been in the plans since the beginning—Quintuple play anyone?) Sprint gets a poster boy for a marketing move that leverages local providers' good will to take its MVNO offerings to new markets. (About LUS getting access to Sprint's new iPhone 4S: I refuse to get my hopes up.)
    • Down another dimension Sprint agrees to supply or use a WiFi network or a series of WiFi hotspots. AT&T and Verizon both have programs in place to use localized WiFi networks to reduce congestion on its networks (especially in "small" high traffic areas like hospitals, malls, and stadiums). Sprint has announced its intention to join them, and reveal the plan in 4th quarter (this quarter) of this year. The questions here would be how extensive it would be and what would be LUS' role. 
      • On the most ambitious end Sprint and LUS launch a city-wide wifi network with Sprint getting some sort of exclusive deal to use it to offload voice and data traffic. That would give Sprint an enormously powerful local network, far outpacing any others and would give Lafayette a ubiquitous wireless network any citizen-customer could use.
      • At the least ambitious end Sprint announces a series of hotspots, centering on the downtown area and large event venues using LUS Fiber for backhaul.
    • Or some combination of the above...
  • But various permutations of a wireless play don't exhaust the realm of possibility...Sprint has a powerful wired network too — and, even more than the other carriers, a noticeable lack of easy backhaul to supply its ubiquitous cell towers.
    •  LUS Fiber could be providing that backhaul in Lafayette Parish in a comprehensive move that leverages the wholesale fiber network to provide Sprint with munificent backhaul that would make 4G's new bandwidth demands easy to supply. A smaller move in this direction would entail only using the dense city network. In such scenarios Lafayette gets Sprint 4G wireless early. 
    • Or LUS Fiber could be using Sprint's Tier 1 network for backhaul at a substantial savings.
      •  One permutation would have LUS Fiber switching from satellite download of its video feeds to using Sprint's backhaul to tap into extremely high-quality feeds that travel over fiber. 
    • Or some combination of the above....
  • Or some other wild idea or combination...ideas?
Looking forward to Monday.

4 comments:

LTC_Pere said...

New to this blog, but I will need to follow it in the future. Out of all of the possible scenarios you've listed, I'd tend to think that Sprint will use the LUS network for backhaul IOT facilitate the implementation of 4G services in Lafayette.

Ofcourse I know that my ideas are solely theory, but to me it's a move that would make sense on both Sprint and LUS's respective parts. It would be a very good cash flow for LUS and put Sprint into multiple unique advantages locally.

I can't wait to hear what they have to say.

Anonymous said...

sorry none the above happened.

LTC_Pere said...

I disagree with saying "none of the above" happened. I would like to think that I was atleast somewhat right in that Sprint is going to use the LUS network for backhaul. It also supports my theory that it will be used for 4G data considering that one day Sprint will move 4G into the area.

John said...

LTC_Pere, Maybe the most accurate thing to say here is that none of that has happened...yet. I've got high hopes.