Sprint Decides to Cut Capital Spending by 36 Percent Amid Mobile Network Overhaul

Sprint, the nation’s leading network carrier is reducing their capital spending by 36 percent this year. The corporation believes that this step can help conserve cash and improve its wireless network and also help add consumers in this increasingly competitive market.     

The operator, which is mired in debt and losses, is planning to cut spending to $3 billion from $4.7 billion in fiscal 2015. Though Sprint’s Chief Executive Officer Marcelo Claure has said that their mobile network is state-of-art enough to lure customers from other major network carriers, including Verizon Communications Inc., AT&T Inc., and T-Mobile US Inc., the analysts are taking the move as a spending squeeze which can leave the carrier behind its rivals. 

“The punch line here is that we are building our network, we are not delaying any spending and, more importantly, we are building our network way smarter than we did in the past,” Claure said. Sprint, now the No. 4 carrier, faces the challenge of cutting $2 billion in annual costs, while raising cash and attracting new subscribers to a faster network. 

In a break from convention, Sprint is looking for alternatives to cut 20-year agreements with tower companies, and has decided to put small antennas & transceivers on building rooftops & utility poles in some areas to improve signal reception. 

“This is largely a deferral of capital spending from 2016 to 2017, again, a move towards sustainability rather than growth,” Craig Moffett, an analyst at MoffettNathanson LLC said in a note Tuesday. Moffett, who has a sell rating on the stock, described Sprint as “spectrum-rich but network poor.” The carrier’s plan to make the most use out of a vast trove of 2.5 gigahertz spectrum is “taking longer than expected and will mostly come in 2017 rather than 2016,” he wrote.

Overall, the cost cuts helped make up for a lower amount of subscriber additions than estimated. Also, the sources say, “Adjusted earnings before interest, depreciation and amortization for the fiscal fourth quarter, which ended March 31, was $2.16 billion, compared with a $2.02 billion average of estimates compiled by Bloomberg. The company cut $1.3 billion in expenses in the fiscal year”.

Sprint’s Newly Launched “LTE Plus” Network Reaches 191 Markets including New York

Sprint, one of the largest US network carriers, declared the launch of its "LTE Plus" network across New York. The carrier is claiming that it has doubled the speed and capacity of more than 900 2.5 GHz cell sites in the market since the beginning of the year.      

    

Sources say that Sprint's LTE Plus combines transmissions in three bands of spectrum - 2.5 GHz, 1.9 GHz and 800 MHz and can deliver speeds in excess of 100 Mbps on supporting devices. In January, the network operator confirmed that the offering was available in 150 markets across the country, and it has since been extended to more than 190 regions.

           

"Our 2.5 GHz spectrum excels at moving high volumes of data at very fast speeds," Sprint CTO John Saw said in a prepared statement. "And our deep 2.5 GHz holdings give us more capacity than any other carrier in the U.S. This is a tremendous advantage, allowing us to keep adding the capacity and speed needed to serve New Yorkers' demands for data now and well into the future."

The declaration underscores Sprint's ongoing effort to maximize its spectrum holdings via LTE even as some rivals move ambitiously toward 5G. Jay Bluhm, Sprint's VP of network planning, said earlier this week “the carrier is taking a wait and see approach to 5G, noting that there's a lot in 4G and LTE Advanced still to be had to address ever-increasing data traffic on the carrier's network.” 

Sprint's network traffic has increased 85 percent year over year, Bluhm said at the Competitive Carriers Association's Mobile Carriers Show, and is on pace to triple by 2020. “The operator is leveraging LTE Advanced optimization technologies such as carrier aggregation and beamforming to meet that demand”, he said. As Sprint struggles to make ends meet through complex financial transactions, it will continue to leverage its high-frequency spectrum as fully as possible, CFO Tarek Robbiati said recently.

 "The most efficient spectrum for high-capacity networks is high-frequency spectrum, so the sort of spectrum we have, 2.5," Robbiati said last month. "And there's a simple engineering law that governs this. It's that higher frequency spectrum is more efficient to handle very large capacity of traffic, and that's a world we're moving toward with 5G."