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December 07, 2010

Dan Hesse - Sprint (Walt)

Dan Hesse - Sprint (Walt)

The real difference that 4g makes is for interactive media not just because of capacity and speed but latency. Video is coming in and latency is very important. The two standards WiMax and LTE each have three versions. We are putting in 16E version of WiMax and in Japan they just trialled WiMax 16M at 300mb/sec.

Walt: why WiMax? Dan: we wanted to be first and when we started this the spectrum we had meant WiMax was available to us then. LTE will be the larger global ecosystem. We thought it was to be important to be first. It prodded Verizon to move faster and in 2010 we will have 120mi POPs up.

Walt: numbers? Dan: if you go to clear wire wholesale numbers it'll give you a pretty good feel and the lion's share of evo and epic is us. If you look at the Sprint brand and the Nextel business. What we said is that beginning in 2013 we will turn down Nextel but only after we add PTT to the other networks. 4g is one element of many that has helped out business. The last two quarters, Sorint is the fastest growing brand of any postpaid brand in the US. Simple pricing, value, better customer service, 4g. Our brand improvements have been dramatic. iPhone: I can't say if we are going to get it. Under the right terms and conditions we'd like the iPhone.

Walt: you are also part of the CTIA (you will be chairman in 2011) but what about tiered pricing. Dan: tonnage is driving this because the new devices use so much more data. 15 years ago I launched world net and it was the first unlimited pricing. Customers will pay a premium for simplicity and unlimited. Just not to have the worry and even though the plan is more expensive and even if they won't use all that data. One of the ways we want to differentiate ourselves - simply everything plan. We can increase revenues and decrease costs, we eliminated 85% of our rate plans, we reduced the number of calls to customer care by 50% per customer. So far - we are not going to do tiered plans but we increased our top rate plans for devices that use more. When you get the really big screen, the fast processor, they use a lot more data. Right now our bias is to stick with unlimited. You have to manage the two tails - low usage plans and high end but also to manage abusers. The big development could be - because the world is changing from one device to multiple devices. Could I have one plan for all my devices? Everyone in the industry is looking at this right now.

Walt: metering has been reimposed on us. Isn't that going to depress app development and services? At some point the only way is that capacity is going to increase is if the carrier can manage ROI on the network. If a lot more spectrum were available and the FCC agrees, we could manage pricing.

Walt: Clearwire. You own most of that company and they are building your WiMax network, are net they competing with you? Dan: I am in wholesale and retail, and the real issue is which is the more important business. Walt: if you own 54% can't you tell the ? Dan: we don't have voting control. That's why we don't consolidate their numbers in our results. At the time we did the deal is that we didn't have the money to do the network ourselves. So having a separate public company was advantageous. We expected that with this many owners we couldn't all agree.

Walt: 4g how would it change my life? Dan: very fast load times, uncapped data cards, great video.

Audience: have Verizon really caught up with you? Dan: most important things are devices. How many smart phones, air cards, myFi cards. To my knowledge there isn't a Verizon smartphone that they have announced.

Audience: Clearwire going to tower companies and doing separate deals, doesn't this give you a cost disadvantage. Dan: yes there are potential synergies. Expect to see more synergies and network asset sharing going forward.

Audience: net neutrality? Dan: we are very supportive of the FCC proposal.


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