Sprint PCS is expected to announce its next round of contract awards this week for the third phase of its personal communications services network buildout.
Lucent Technologies Inc., say analysts, will receive the bulk of the contract. The new contracts keep all three of the carrier’s vendors at the same contribution level, with Lucent providing about 50 percent of Sprint PCS’s equipment, and Northern Telecom Inc. and Motorola Inc. providing about 30 percent and 20 percent respectively.
Sprint PCS’s rapid nationwide buildout of Code Division Multiple Access technology now brings into question what the company will do with the Global System for Mobile communications network it operates alongside its CDMA network in Washington, D.C. Some industry insiders speculate Sprint will replace the network with CDMA equipment possibly next year.
Sprint declined to comment. However, sources indicate the company’s GSM network, which Sprint gained control of last year from pioneer’s preference winner American Personal Communications, has been on the sale block for many months with no interested buyers.
Another headache for Sprint PCS is a class-action lawsuit looming against the company filed on behalf of its own GSM customers. The customers, having received letters from Sprint PCS urging them to switch to the company’s CDMA network, filed suit, claiming the carrier misrepresented that GSM coverage would continue, and the operator should give free upgraded CDMA handsets. The company today offers a discount on CDMA handsets if GSM subscribers upgrade to that network.
The absence of a GSM network in Washington would create another hole in a GSM footprint GSM carriers have desperately been trying to fill by purchasing licenses in the C-block PCS re-auction. Omnipoint Communications Inc. owns a basic trading area PCS license in Washington, D.C., but has yet to build it out.
Sprint PCS shares fell last Wednesday after Morgan Stanley Dean Witter cut its rating of the company’s stock to neutral from strong buy.
