Inside Towers reported last week that Sprint was going to be building out its network with 9,000 new sites. Some new reports have surfaced claiming that Sprint could even build 20,000 new sites, but are they ready for this step? Senior Analyst at Wells Fargo, Jennifer Fritzsche, wrote, “Recent reports have Sprint ready to announce 9K – 20K new cell sites. How would this be received? Positively in our view. Yes, this would most definitely be a big capx nugget. But is that a bad thing? One of the consistent criticisms of this story from the Sprint bears is it would almost be better received if Sprint just backed up the truck on capx – they have the spectrum but what good is this asset if it is just sitting idle? Also a heavy duty capx commitment would offer tangible evidence that Softbank in NO WAY has “given up” (to quote a peer) on Sprint.” After T-Mobile’s fourth quarter earnings report, it would seem that Sprint might be in the bottom slot of the four wireless carriers. This could have been the long awaited catalyst that spurred discussion at Sprint as to how keep up. On February 5, the company reported operating results for the third fiscal quarter of 2014. They announced they had postpaid net subscriber additions of 30,000. Fritzsche explained, “ When we asked this very question (why not spend more?) on its last earnings call, S’s CFO Joe Euteneuer gave a cryptic but maybe telling answer. Specifically he said: ‘We’ll give you a full capital plan on our next call… yeah, I think there’s more to hear. But rest assured that we are going to fully utilize our assets with a capital program that supports that philosophy.’ If this capx comes and Sprint takes the asset it has to a new level – a major part of the bear case just got removed.”
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