Five years ago, the dividing lines were clear. There was your WiFi world, drafting off a home or office broadband connection; and your mobile world, for most other scenarios. But WiFi is becoming a much larger part of the overall connectivity framework. Important advances are occurring in technology and business models, and deltas between macro and micro wireless networks are shrinking. Five years from now, will you have separate subscriptions and providers for fixed and mobile broadband? Read more...

 

For those with bandwidth left over from the sagas of the season ending episodes of Mad Men, Bruins-Blackhawks final, Edward Snowden, or Canada's mayoral carnivals, the Sprint-Clearwire-Softbank soap opera has been quite a DISH. Now that is appears that Softbank has won Sprint and Sprint has won Clearwire, let's ponder what's next.

 

Overall, this is good for the industry. Sprint and TMO need to be properly capitalized, if they are going to mount credible competition to Verizon, AT&T, and the greater fixed and mobile broadband world. Now that there's clarity, Sprint can confidently move ahead and execute on its Network Vision initiative, incorporating its plan for Clearwire into that mix.

 

What Does This Mean for the Industry?

I think Softbank owning Sprint will not be as disruptive to the industry as DISH would have been (click here for my views on the impact of DISH-Sprint). DISH wants to upend the greater fixed & mobile broadband universe, while Softbank is more laser focused on the mobility space. The biggest near-term effect of the Softbank acquisition, if there are no more bumps in the road, is that Sprint gets to breathe a big sigh of relief and move forward with Network Vision. Sprint has a lot - and I mean a lot - of work to do to catch up to Verizon, AT&T, and TMO on the network side. This will be fairly preoccupying over the next 12-18 months. As it helps Sprint execute on Vision, I expect Softbank will push hard to differentiate Sprint's LTE network, offering tri-band LTE and wider band services, especially in cities, leveraging the Clearwire network. Softbank adds leverage and scale to convince handset OEMs to make tri-band LTE devices.

 

As Sprint's network turns from a liability into, potentially an asset (within 12-15 months if it plays its cards right), expect to see a much more aggressive company. I'd predict a big advertising campaign, possibly re-branding or re-positioning the company, but still focusing on the differentiated unlimited offer. Sprint will also have to come up with a new trick to steal some of the 50-60% of U.S. consumers who are in a "family" or "shared data" plan with AT&T or Verizon. We will surely see some disruptive pricing in the U.S. wireless market. There's a lot of room below $10/GB, which is the prevailing mobile data pricing. There's also room below the $200+ a month a family must spend with Share Everything/Mobile Share. There's opportunity to offer creative plans for the 75%+ of "connected" devices, such as tablets, that are not cellular-enabled. And with the handset ownership/procurement model slowly, but steadily, moving away from a subsidy model, there will be more froth in the market, hence more subs and more devices up for grabs, and more often.

 

Additionally, as Sprint rolls out LTE and expands its 4G capacity, I would expect the company to court a significant MVNO partnership from a major Internet or media company. Think Amazon, Google, Netflix, Facebook, or Viacom, for example, who want to develop creative offers that bundle in content with connectivity. DISH could be part of the fray if it fails to execute on a facilities-based deal. Sort of like Obama asking Hilary to be Secretary of State after he beat her for the nomination and won the election.

 

What Might DISH Do?

 

DISH was determined but clearly had a limit in terms of how much it was willing to bid for Sprint & Clearwire, especially given its unique financial situation. This will not be the last of DISH in the wireless space, however. It is determined to disrupt current market structures. DISH strongly believes there's opportunity to capture share of the relatively uncompetitive fixed broadband market. With the densification of cellular networks, spread of WiFi hotspots, and LTE roadmap, a key strategic and market structure question is whether, 3-5 years from now, fixed and mobile broadband services will still be distinct.

 

There is a chance that DISH could try to scoop up T-Mobile, or perhaps sign some form of unique MVNO or network sharing deal. It could also cobble together a terrestrial wireless network, through select acquisitions (Leap comes to mind) or some form of hybrid structure, similar to how Metro PCS and Leap Wireless had structured their "nationwide" offerings over the past few years. Some stake in or relationship with Clearwire is still on the table, once the boards vote and the heat of the current moment dies down.

 

The battle might be over but the war is not.  

 

• Operator consolidation
• Innovative business models
• Network evolution and economics
• Wireless IP and patent issues
• Value of spectrum

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