Sprint recently announced it plans to move much of its network densification spending into 2017, decreasing its capital expenditure by 36 percent compared to last year. Some have speculated this slowdown in spending as a result of the long, drawn-out process city governments are using to approve small cells, noted RCR Wireless.
Currently, many city governments are bogged down by an influx of applications, making a slow process even slower. The process for small cell approval can take anywhere from 18 months to two years.
“Two things are happening,” Iain Gillot, an analyst at IGR Research, told RCR Wireless. “One is the volume of requests is going up … and then also there are stories out there and issues with people trying to circumvent the process and go around to get themselves in faster, which doesn’t help anybody … things stop, the process slows down … when some cities start saying ‘time out; we need to go look at this’ that becomes a major problem for everybody.”
With the reduction in capital expenditures, Sprint will spend an estimated $3 billion in network expansion in 2016. Experts say the carrier won’t come out of “hibernation” until the process for small cell approval begins to improve.
“Their huge cut to network spending suggests that they are going to remain in hibernation mode, minimizing cash burn in the hopes of buying time but with limited prospects for a real recovery,” Craig Moffett, an analyst at MoffetNathanson said.