Sprint is Beating Verizon and AT&T in This Key Arena

When Sprint’s (NYSE:S) deal with Clearwire (NASDAQ:CLWR) is finalized, the United States’ third-largest wireless carrier will own the most spectrum of any wireless provider in the country, which will be an essential asset in the company’s efforts to expand its LTE service to match the coverage of AT&T (NYSE:T) and Verizon (NYSE:VZ).

What will Sprint do with its new spectrum?

Even as Sprint waits for its deals with Softbank and Clearwire to close, the company continues to expand its high-speed service to new markets; the carrier announced on Tuesday that its 4G LTE service is now available in the metropolitan Chicago area and six new areas.

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These new additions increase Sprint’s total 4G covered markets to 49. In comparison, Verizon’s LTE network serves 470 markets and 250 million customers, and AT&T offers the service in 125 markets. The nation’s second-largest carrier, AT&T, announced a service expansion to 4 new markets on Tuesday as well.

While both AT&T and Verizon, whose market dominance has been labeled a duopoly, clearly out-match Sprint in terms of customers and high-speed service, but Sprint owns as much spectrum as both carriers combined — roughly a third of all available spectrum in the U.S.. Its spectrum holdings are made even more impressive when the company’s small customer base is taken into account. Sprint will have 200 MHz for 56 million subscribers. Verizon has 105 MHz for roughly 100 million subscribers. Sprint will have 3.57 MHz of spectrum for each customer when its takeover of Clearwire is finalized, whereas Verizon has just 1.05 MHz per subscriber.

CHEAT SHEET Analysis: Will Clearwire’s spectrum be a positive catalyst for Sprint’s stock?

One of the core components of our CHEAT SHEET Investing Framework focuses on catalysts that will move a company’s stock. As FierceWireless’s Roger Entner noted in his analysis of the company’s spectrum holdings, “Sprint will have far more flexibility to develop its network and business plans to compete with Verizon and AT&T than even T-Mobile.” The additional spectrum will enable the wireless carrier to offer lower prices and higher speeds, and handle the additional wireless traffic generated by the rising numbers of tablets and smartphones.

But Sprint’s Clearwire acquisition is still dependent on the approval of the Federal Communications Commission. If approval is granted, the Clearwire takeover will close after Softbank acquires its 70 percent stake in Sprint, which is expected in mid-2013.

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