Sprint to Lease Spectrum, Increase Density

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Sprint Corporation CEO Marcelo Claure says the company has accomplished about 40 percent of intended changes as part of its five-year plan. Claure, now head of the carrier for 2+ years, told the Goldman Sachs Communacopia 2016 on Tuesday, though it’s “worrisome” when a company has been losing millions of customers for a while, he feels executives are getting Sprint back to growth. The company plans to lease some of its spectrum to help finance the company, he said, without giving specifics.

Claure cites improvements in network coverage, speed and reliability. Sprint is also reducing costs where it can, committing to “take $2 billion in run rate savings this year.” The carrier also reduced its marketing spend by 30 percent while increasing sales in postpaid business.

The employees have been enticed to save the company money, says Claure, with a “turnaround incentive package.” That has meant the 30,000+ employees think more entrepreneurially now.

“We tell people there are rules for you to spend money, but there are absolutely no rules for you to save money. And it’s amazing what people will do to save money,” according to a Seeking Alpha transcript.

Speaking of 5G, Sprint has been working to “densify” its network using small cells on utility poles and now other carriers have followed suit, according to the CEO. “We have a lot of spectrum and we have choices whenever we want to put a small cell whether we use wireless backhauling which you don’t need to connect to fiber or whether you use fiber.”

Asked to put some numbers behind that, Claure said he’s talking about deploying “tens of thousands of gear,” including small cells, micro cells and Phantom cells.

Sprint used to deploy a network by installing micro sites, contracting with power companies and outsourcing the management. Now, “Every single structure comes into a control tower in which we basically figure out what is the most cost efficient and the fastest speed that you can deploy a structure.”

Not wanting to tip off competitors, he declined to detail deployment and operating costs. Claure recently became chairman of CTIA. One goal is to ensure the U.S. “doesn’t lose the edge we had” in 4G as the industry makes the move to 5G.

The FCC has done a good job allocating spectrum, he believes. Transport, or how companies track data on a backhaul is a contested area, he acknowledges. Some companies like the federal government to regulate the price of backhaul and others don’t.

Zoning and permitting remain issues; some cities and mayors “understand the economic progress they can make by having a connected city,” he says. Some cities encourage carriers to install macro or small cells and others don’t. That’s why CTIA would like the federal government to play a more active role there “so it’s not a hit or miss depending on what city or what account you go to.”

Asked by an analyst in the audience why Sprint chose to pass up the FCC’s spectrum auction, Claure said: “We decided we don’t need it. We have enough spectrum,” according to the transcript.

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