Clearwire may be losing Sprint as a wholesale WiMAX customer, but it appears that it has gained Sprint as a wholesale LTE customer.
Sprint will use Clearwire's TD-LTE service to add capacity to its own LTE network, slated to launch early next year, network executive Bob Azzi said during his keynote address at 4G World on Wednesday.
"We're taking advantage of the depth of Clearwire's spectrum for hotspots and offload," Azzi said, saying it will serve as an "offload layer in the hottest of hotspots."
Sprint and Clearwire are working with vendors on chips and devices compatible with both of their respective FDD-LTE and TD-LTE networks. Smartphones will have to be compatible with both technologies to take advantage of the capacity boost from Clearwire's network.
The decision was first announced by CEO Dan Hesse during Sprint's earnings call Wednesday. The news sent Clearwire's stock surging more than 20 percent as investors saw it as a way for the operator to offset the loss of Sprint as its primary WiMAX customer.
Sprint said earlier this month that it would phase out its use of Clearwire's WiMAX service next year in favor of its own LTE network, which is expected to cover 250 million people by the end of 2013. The decision was a blow to Clearwire, which depends on Sprint for the bulk of its wholesale revenue.
Sprint's LTE network will have a "much broader footprint" than Clearwire's WiMAX network, Azzi said.
Azzi did not discuss timing or funding for Clearwire's TD-LTE network. Clearwire needs $600 million to deploy the service, which will serve as an overlay to parts of its WiMAX network. Sprint also needs to raise money before it can deploy its own LTE network and has not said whether it will help pay for Clearwire's build-out.
Sprint's decision to abandon WiMAX in favor of LTE was mentioned in a later speech Wednesday by Tom Jasny, vice president of wireless and broadband network systems at Samsung.
Samsung is also providing network equipment for Sprint and C Spire Wireless’ respective LTE deployments and has partnered with MetroPCS to bring the first LTE smartphone to the U.S. market, the Galaxy Indulge.
Jasny said that the aggressive deployment of LTE in the United States by MetroPCS, Verizon Wireless, AT&T and Sprint has made it the hottest smartphone market in the world.
"Smartphone adoption has grown quickly in North America at rates exceeding the rest of the world," he said, citing the 42 percent of all cell phone users in America that own a smartphone.
Of course, along with smartphones comes data traffic. Though LTE provides a clear advantage over 3G in terms of speeds and spectral efficiency, vendors like Samsung are already starting to talk about the need to increase capacity on the next-generation mobile broadband networks.
Jasny said Samsung is stepping up to the challenge with new architectures that use a combination of macrocells and small cells.
In December of next year, Samsung will come out with two new products targeted at the rising tide of data.
The first, its content delivery network, will use caching and optimization to help operators address traffic from mobile video, a primary source of network congestion. The other solution, its mobile user behavior analysis and control service, will "take the management of traffic and information on subscriber behavior and turn them into future business models," Jasny said.