Sprint’s commitment to roll out nearly 70,000 small cells in cities across the country, mainly through Mobilitie, has slightly halted due to issues in obtaining authority for transmitters. Some Wall Street analysts are questioning the large amount of money that the company is writing off from customers who got in contract for the carrier’s handset-leasing offer and later took the devices for no charge.
Regarding the Sprint network, The Wall Street Journal stated that Sprint is trying to deploy small cells, principally for its 2.5 GHz spectrum, on utility poles in "public rights of way," which includes the land that holds city utilities such as street lamps, fire hydrants and several others. Sprint is reported to be working with Mobilitie to install the briefcase-sized antennas on the poles.
But the efforts are temporarily suspended as Sprint awaits zoning approval for some of the small cells. This is also a bit of the reason for lowering the capex guidance for the remaining part of the year to $3 billion, much lower than the expected value of $4.5 billion.
As per the WSJ, Mobilitie currently has 1,000 permits and will start a wide-scale rollout when it has more. Mobilitie's CEO shared that building and operating cost of the small cells is $190,000 over 10 years, which is much less than the average cost to operate a macro tower. Also the filing of permit applications under different names has led to confusion. The company has said that all future applications will be filed under the name Mobilitie.
The analysts at MoffettNathanson observed that the company incurred a $166 million loss that is related to "cell site construction and other network costs that are no longer recoverable as a result of changes in the
Regarding the Sprint network, The Wall Street Journal stated that Sprint is trying to deploy small cells, principally for its 2.5 GHz spectrum, on utility poles in "public rights of way," which includes the land that holds city utilities such as street lamps, fire hydrants and several others. Sprint is reported to be working with Mobilitie to install the briefcase-sized antennas on the poles.
But the efforts are temporarily suspended as Sprint awaits zoning approval for some of the small cells. This is also a bit of the reason for lowering the capex guidance for the remaining part of the year to $3 billion, much lower than the expected value of $4.5 billion.
As per the WSJ, Mobilitie currently has 1,000 permits and will start a wide-scale rollout when it has more. Mobilitie's CEO shared that building and operating cost of the small cells is $190,000 over 10 years, which is much less than the average cost to operate a macro tower. Also the filing of permit applications under different names has led to confusion. The company has said that all future applications will be filed under the name Mobilitie.
The analysts at MoffettNathanson observed that the company incurred a $166 million loss that is related to "cell site construction and other network costs that are no longer recoverable as a result of changes in the
Company's network plans."
"Although $166M (out of a ~$3B current capex plan) once again represents a relatively modest amount, and indeed an amount that may have been spent years ago, one wonders if there is the potential for additional capex-related write-offs should Sprint continue to slash prior network commitments," wrote analysts about Sprint's charge.
Analysts also added "Interestingly, Sprint's 10-K discloses that Sprint is now borrowing against future lease receivables, having sold $1.2B in not-yet leased device receivables for cash of $600M in the calendar first quarter. This suggests that Sprint may be running out of runway for additional handset securitizations," "Perhaps this is why T-Mobile, after a brief dalliance, has decided to de-emphasize leasing."
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