Morgan Stanley Comments on Sprint Nextel's 4G Strategy

Morgan Stanley has published a report on Sprint Nextel S as the company unveils its 4G deployment strategy. In the report, Morgan Stanley wrote, "We remain cautious on Sprint as we believe it will be several years before the benefits of Network Vision can be realized. Our medium term estimates remain below consensus. We remain Underweight. Sprint's evolving 4G strategy is critical to its future. We believe Sprint needs to move quickly towards an LTE solution to avoid falling behind in the 4G stakes. Most 4G alternatives involve tradeoffs for the company. Press reports suggest 4G update likely pushed to the fall from ‘mid-year' before, implying that the company is still finalizing its strategy and build out plans. We expect Sprint to initially deploy LTE in its existing spectrum, although this may not provide enough capacity for the medium term. Sprint plans to launch Network Vision in eight markets in 4Q11. Sprint has had notable success with its 3G/WiMAX enabled smartphones, indeed we estimate that they will account for some 20% of the CDMA customer base in 2Q11." Morgan Stanley rated Sprint Nextel an Underweight with a price target of $3.00. Sprint Nextel closed Monday at $5.15.