Claure Sprints to Tokyo

Monday evening, SoftBank announced their fiscal year results, and discussed the future of Sprint’s network. SoftBank Chairman Masayoshi Son feels more comfortable with Sprint’s operations now compared to three months ago. Kevin Smithen at Macquarie Securities noted, “Sprint CEO Claure is in Tokyo discussing a new ‘next-gen’ network plan with Son-san and SoftBank senior management. We continue to believe that Sprint will incorporate C-RAN technology over small cells as part of its network architecture at substantial savings per node/site over earlier Network Vision deployments.” Sprint forecast $5 billion capex this year, and many hope it will be used to build out their network. “Sprint’s $5 billion network capex forecast guidance appears to be a placeholder until Son-san and SoftBank sign-off on the new plan (and we assume long-term financing strategy). We expect that Sprint will provide to the market a more detailed 2-3 year capital plan over the coming months, once the network design is finalized and RFPs are completed. In our view, investors should not mistake Sprint’s lack of specificity on capex guidance for a lack of a plan. We just believe that plan was not finalized before Sprint’s earnings call,” Smithen explained. “We came away from SoftBank’s results sensing a recommitment to Sprint and more optimism than in recent qtrs. In our view, this should put to bed recent market concerns that SoftBank was looking to exit Sprint. We would use the recent pullback to build positions as we continue to believe that lower churn and higher gross adds (from RadioShack stores) will drive postpaid phone sub growth later this year.”