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Impact of Hurricane Sandy on Wireless Service Providers


Exact numbers on damages remain unknown.

An announcement yesterday on an official Sprint blog stated it was experiencing service disruptions in the New York tristate area, parts of Pennsylvania, and parts of New England. Sprint cited loss of commercial power, flooding, loss of cell site backhaul connections, site access, and damaging debris as reasons for the service outages. Sprint closed down 180 stores before the store, and 80 were reopened on Tuesday.

A Sprint spokeswoman said yesterday that teams were still surveying the damage caused by the storm, but the teams could not investigate certain areas that were deemed too dangerous. Flooding in the Battery Park area has caused outages in lower Manhattan.

The Sprint announcement also mentioned that the Sprint Emergency Response Team will provide any local agency with 14 days of service free of charge for 25 Sprint ERT wireless devices upon request.

AT&T seems to have come out of the storm in the best condition. CNNMoney reported on Tuesday that an AT&T spokesperson stated that the "vast majority of our cell sites in the Northeast are online and work."

AT&T and T-Mobile have agreed to allow each others' customers to use their networks in New Jersey and New York. Both companies tried to merge last year in a $39 billion deal, but federal regulators would not allow it. It does not appear this temporary collaboration will lead to anything permanent. Both providers use GSM and UMTS standards, so they can share voice and traffic data. Also, customers can report to AT&T any lost or stolen wireless devices, and AT&T will block these devices.

According to eWeek, AT&T tried to alleviate the situation in lower Manhattan yesterday by deploying Cellular on Wheels, which are mobile platforms that have radio base equipment on them. These platforms use mobile generators and received a signal from a microwave link. Here's more from CNET on how AT&T aims to help those in lower Manhattan.

It is still too early for analysts to determine the financial impact on wireless carriers. The telecom sector already struggled in October, though, ranking among the worst performing sectors.

Analysts are watching Sprint, which is working on launching its 4G LTE networks to compete with other 4G providers. Analysts want to see how much damage costs will chip away at the $8 billion the company received from the Softbank (TYO:9984) deal. Sprint originally planned on using the money to pay down its debt and build its LTE network infrastructure.
Some have tried drawing comparisons to damages caused by Tropical Storm Irene to begin calculating estimates. In the third quarter of 2011, Verizon said that a two-week strike and Tropical Storm Irene cost the company about $250 million.

According to TelecomLead, Hurricane Sandy may negatively impact smartphone sales growth in 2012 as people in the North East reprioritize their budgets. The drop in demand for smartphones from companies such as Apple (NASDAQ:AAPL) and Samsung (KRX:005930) will hurt the telecom companies that provide access to wireless networks.

Twitter: @ChrisWitrak
No positions in stocks mentioned.
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