Sprint's move to offer customers 4G services via a new partnership with LightSquared could boost the company?s standing in the competitive wireless carrier space. 

Sprint and LightSquared have reached an agreement to share the network expansion and equipment costs that will enable Sprint to offer 4G LTE service. The move comes at a time when Sprint is facing strong competition in the market from Verizon and AT&T.

?AT&T?s proposed acquisition of T-Mobile USA probably forced Sprint?s hand,? said Mike Roberts, principal analyst and head of Americas at research firm Informa Telecoms & Media, Westborough, MA. ?The AT&T deal with T-Mobile USA would put Sprint in a weak position compared to AT&T ? T-Mobile USA and Verizon Wireless, so it needs to find new ways to compete ? and the deal with LightSquared will help.?

AT&T is trying to buy T-Mobile from Deutsche Telekom, which would make it the largest wireless network in the US.

Consumer needs
Sprint, Overland Park, KS, currently uses the slower WiMax network. By upgrading the network to the faster 4G LTE network, the company could reduce customer turnover.

The deal with Reston, VA-based Lightsquared will also provide Sprint with financial benefit and give it a chance to provide the kinds of services that mobile consumers are looking for.

From LightSquared?s perspective, the move also makes sense.

?T-Mobile was an obvious potential partner for LightSquared but AT&T?s move stopped that, which left Sprint at the top of the list,? Mr. Roberts said.

The Sprint-LightSquared deal makes sense as data usage climbs thanks to the popularity of mobile devices.

?Having more bandwidth is essential for all Internet service providers,? said Noah Elkin, principal analyst at eMarketer, New York. ?There are more applications and services that require faster networks and every carrier is in a race to build out these networks as fast as possible.?

However, the deal with LightSquared does have its challenges.

Sprint holds a 54 percent stake in Clearwire, which built the WiMax wireless network.

?The deal will complicate Sprint?s relationship with Clearwire, its current 4G network partner via WiMax,? Mr. Roberts said. ?LightSquared also has some major technical challenges ahead as its LTE services could interfere with GPS ? a problem the FCC has said will have to be resolved before LightSquared can launch services.?

LightSquared this week outlined a solution to the problem of interference with GPS receivers. The company reached an agreement with Inmarsat, which controls a block of spectrum that does not interfere so much with GPS receivers that will allow the rollout of its wireless in a timeframe that keeps to the original business plan

Sprint might also decide to offer 4G services at a lower price than AT&T and Verizon, as suggested by its recent history of competing by bundling data plans and offering them at a lower price, per Mr. Elkin.

The strategy has been working for Sprint of late.

?Sprint has turned the tide a little bit in terms of churn and net additions to its subscriber roles in the last quarter,? Mr. Elkin said.

Sprint reported a reduction in churn and the addition of 1.1 million net wireless customers in the first quarter of 2011.

?To the extent that Sprint, which is a distant third in the market, can provide these services at a lower cost than AT&T and Verizon, it may make them more competitive,? he said.

Final Take
Chantal Tode, Mobile Marketer