Sprint Steps Up

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Sprint reported solid fiscal first quarter earnings earlier this week, and Chairman Masayoshi Son, also CEO of SoftBank, which owns a 78% stake in Sprint, expressed its confidence in the wireless carrier. On the conference call, Son reiterated that there are no plans to sell down its stake in Sprint, that there’s no need for equity or public bond financing, and that there is no pressure to sell Sprint’s existing spectrum. Amir Rozwadowski of Barclays explained, “SoftBank also emphasized its confidence in an eventual Sprint turnaround based on the goals of a ‘large’ opex [operating expense] reduction, improved capital deployment, better network quality, a sensible device financing program (leasing), and debt reduction. SoftBank believes its own turnaround story.” But what are the company’s plans to actually improve their network? On August 4 conference call, President and CEO Marcelo Claure noted, “We plan to deploy tens of thousands of small cells in the next three years to increase the coverage and capacity of the network, leveraging all spectrum bands with the potential to increase the number over time.” This reiterates RBC Capital Markets analysts Jonathan Atkin and Brian Hyun prediction that Sprint will deploy 70,000 small cells. Sprint executives didn’t give an exact number on how many small cells the carrier will deploy, but they expect to use various options for deployment of backhaul in order to balance the performance, cost, and speed to market. Claure even compared Sprint’s network to the other major carriers, “We continue to considerably close the gap to Verizon in overall network performance, in a few of the major metros we’re now tied for the best overall network…Besides the continuous focus on optimization, we have also expanded the breadth and depth of our LTE network with the continued expansion of the 800 megahertz and the 2.5 gigahertz LTE overlays to greatly improve the overall network performance.” Sprint expects to deploy tri-band LTE on all existing sites, and add thousands of macro sites to expand coverage. The thousands of macro sites will be used to optimize the core network foundation, and allow the carrier to increase the number of sites across all spectrum bands to expand their multilayer network strategy.

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