The third-largest U.S. wireless carrier, Sprint Nextel Corp. (S) has announced that it will offer Fourth Generation (4G) Enterprise Wide Area Network (WAN) to its corporate customers. The 4G Enterprise WAN is a fixed wireless access that promises faster, better and secure service on the Sprint Global Multiprotocol Label Switching (MPLS) network.
Sprints’ Enterprise 4G WAN will encourage its customers to shift from the traditional wireline access. The service addresses significant issues related to enterprise communication like network security, reliability, higher bandwidth, cost effectiveness and flexible deployment.
Consequently, Sprint 4G Enterprise WAN substitutes traditional wireline networks to far-flung areas where the installation of traditional wireline is cumbersome.
The company is also focusing on gaining ground in the corporate telecommunication market. It plans to enter the Managed Telepresence platform, which is backed by its advanced MPLS network. The service will comprise high-definition conferencing facilities with advanced audio and video conferencing services that would virtually create the effect of live face-to-face conferencing.
The introduction of 4G Enterprise WAN will further expand the company’s footprint into the enterprise market , similar to its major rival AT&T Inc. (T), which is also contending to tap potential opportunities in corporate communication through its new cloud-based Content Delivery Network (CDN) platform.
The 4G services market is growing rapidly and Sprint already enjoys a strong position with its 4G WiMax services in collaboration with Clearwire Corp. (CLWR). Additionally, the company is also set to provide 4G services through a recent 15-year deal with LightSquared.
Presently, Sprints’ 4G services cover 71 U.S. markets and reached 120 million people at year-end 2010. The coverage is likely to touch 130 million by the end of 2011. Further, to enhance the 4G experience, Sprint also introduced two new 4G tablet data plans with the launch of the first 4G tablet “HTC EVO View 4G”.
We believe the new pricing plans as well as increased 4G services will improve Sprint’s competitive position in comparison to telecom giants like AT&T and Verizon Communications (VZ).
Currently, we maintain our long-term neutral recommendation on Sprint supported by a Zacks #3 Rank (Hold).
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