One reason for Sprint’s slow progress: Apple – Part 1

There have been a number of victims to the attractive yet intimidating technology (s) from the Cupertino-based Apple, Inc. over the last one decade. In a nutshell, only Microsoft has survived the head-to-head battle with Steve Jobs and company over the last couple of decades.

However, this year’s victim is not a software company but a mobile communication carrier, Sprint. Apple started its mobile comm. Business with Sprint back in 2007 when it launched the first iPhone. However, over the last five years, iPhone has evolved but Sprint has not. That is why, the company is touted to be at the brink of going bankrupt in next couple of years.

Sprint shares fell more than 4.5% Monday after Sanford Bernstein argued that a bankruptcy filing for the wireless carrier is “a very legitimate risk.”

Bernstein analyst Craig Moffett blamed iPhone. Sprint signed a rich contract with Apple last year to get the phone on Sprint’s network. That could create problems when Apple introduces a handset built around the high-speed LTE technology available on new iPad.

Analysts expect Apple’s next handset will offer support for the standard, now supported by Apple’s latest iPad tablet computer. To keep up, AT&T and Verizon are spending billions to upgrade their wireless networks.

Bernstein’s Moffett frets that debt-laden Sprint won’t be able to keep up. Sprint has $1.8 billion due through the end of 2013, $1.4 billion in 2014, and another $2.6 billion in 2015 “If Sprint’s performance is not substantially improved from current levels by that time, capital may not be made available for the refinancings,” Moffett writes.

“Sprint doesn’t have enough free-and-clear spectrum on which to launch a competitive LTE network, and it doesn’t have the money to clear spectrum that’s already in use,” Moffett argues. “We expect Sprint’s competitiveness to begin to backslide when LTE becomes the nation’s de facto standard.”

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Posted by Usman Khalid on Mar 31 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.