Alltel, the fifth-largest U.S. wireless carrier, says it will use LTE technology for its next-generation wireless network, not rival WiMax technology. This leaves Sprint Nextel (S) as the only major U.S. carrier using WiMax for its 4G network. (Sprint will spin off its WiMax network into Clearwire (CLWR) this year, pending approval.)
Why does this matter? Alltel isn’t very big subscriber-wise — 13 million, or about 5% of the market — but the carrier covers a massive amount of the Midwest, West, and Southeast. It also uses the same voice technology Sprint does — CDMA.
The first generation of WiMax phones that Sprint releases are likely to be CDMA-WiMax hybrids, execs have said. If Alltel were using WiMax for its 4G network, Sprint and Clearwire might have been able to team up with them as roaming partners, which could have filled in parts of the country that Alltel might have built out faster. Now they can’t.
We don’t think that Sprint was counting on Alltel’s help, and Alltel won’t begin building out its new network for several years, anyway. But either way, this reinforces the challenge that Sprint/Clearwire face: They’re going to have build their own network, with zero help from their telco colleagues.