In a filing made this week with the Federal Communications Commission (FCC), Sprint revealed the real coverage of its 4G LTE mobile network, and boy, it looks ugly.
In the presentation included in the filing, Sprint admitted that its network is facing "severe challenges" and that the footprint of its 4G LTE Network “covers a much smaller geography” and has "significantly fewer POPs than other national carriers" including AT&T, T-Mobile, and Verizon.
The Overland Park, Kansas-based carrier has also revealed that "coverage and consistency challenges impact both network performance and customer perception" and that poor network experience is a leading cause for Sprint’s subscriber churn.
"As a result of our network performance limitations and perception, Sprint has consistently had the highest churn in the industry and failed to retain its subscriber base," said Sprint.
The wireless carrier also confessed that it had not been able to invest sufficient capital to achieve the network performance necessary to attract and retain enough subscribers to improve its scale, and to charge higher prices.
Also, Sprint's high level of debt - it carries over $40 billion in debt - requires the company to "balance debt payments with the need to invest in the network."
Atherton Research's Take
So, has Sprint been lying about the coverage of its 4G LTE mobile network to its U.S. customers?
Well, not really as the fourth-largest wireless carriers in the U.S. has mostly communicated on the extensive coverage of its mobile network (3G and 4G combined) and the speed of its 4G network rather than the actual geographical coverage of its 4G LTE network.
Sprint has also been vocal about the roll-out of its "blazing fast" 5G network planned for the first half of next year, in cities like New York, Chicago, Los Angeles or Washington D.C.
The only reason for Sprint to paint such a dim picture of its business - which appears at the brink of collapse - has a single specific purpose: So that the merger with T-Mobile gets approved quickly despite scaring both current and potential customers away.
Whether this strategy is effective or not, we still anticipate the FCC to approve the $26.5 billion merger which, in the end, will help competition in the 4G but also, more importantly, in the future 5G wireless market.