Sprint LTE Announcement Could Move the Stock

Sprint (NYSE:S) has reportedly signed a deal with LightSquared Inc. under which both the companies will share their network expansion costs and equipment. They both will be involved in jointly developing and operating 4G LTE network, which is the next generation of mobile networks with faster speeds and reliability. At a glance, we believe that Sprint could announce its LTE network buildout soon, which could be a catalyst for the stock. We have lamented in the past the Sprint needs to get past WiMax & put a credible LTE strategy on the table in order to compete with its bigger rivals AT&T (NYSE:T) and Verizon (NYSE:VZ).

We believe that this could be its best shot at regaining some of its market share. The main hang up centers around concerns over LightSquared’s signals interfering with other operators and defense GPS signals, which the company claims is an easy fix. Assuming this can be resolved, the 15-year deal, $20 billion deal could give Sprint new life in the 4G race.

Our price estimate for Sprint stands at $5.80, implying a premium of 10-15% to the market price.

See our complete analysis for Sprint’s stock