Sprint Making Progress in 2.5 GHz Buildout, CEO Says
Sprint is making substantial progress on the buildout of the 2.5 GHz spectrum the carrier got from Clearwire through its Network Vision LTE project, CEO Dan Hesse said on an earnings call Wednesday. Later in the day, Sprint unveiled its new Sprint Spark brand, which it said would offer connection speeds as fast as 1 GHz, with initial speeds of 50-60 Mbps. Sprint acknowledged it lost 360,000 contract subscribers in Q3, which was less than expected based on a consensus estimate. Some of the losses were tied to the carrier’s shutting down its Nextel network on June 30, the company said. Sprint reported net profits of $383 million, compared with a $767 million loss the same quarter last year.
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Hesse said his company is refarming its 800 MHz spectrum, following the Nextel shutdown, rededicating it to voice service. Sprint started the refarming in Q1 and at this point has at least started the redeployment in two thirds of the carrier’s markets, he said. More than 40 percent of Sprint’s postpaid subscriber base has 800 MHz voice capable devices, he said.
Sprint is deploying 4G LTE on 1.9 GHz spectrum “overlaid by 800 MHz and 2.5 GHz to provide greater coverage, speed and capacity,” Hesse said. “It has been very complex and it has been very hard work to take down the Nextel network and to rip out and replace the entire Sprint 3G network in order to build a flexible platform running 4G LTE on three spectrum bands.” Initial deployments have been in urban areas where Sprint needs capacity, he said. Sprint expects that the 2.5 GHz buildout will cover 100 million subscribers and potential subscribers by the end of 2014, Hesse said.
Hesse was more vague on Sprint’s plans on the upcoming spectrum auctions. Brett Feldman, analyst at Deutsche Bank, asked if Sprint wants to buy more mid- and low-band spectrum. “We clearly have a strong spectrum position now with 120 MHz of Clearwire spectrum in 90 percent of the top 100 markets, plus our 1.9 plus 800,” Hesse said. “We will look at the spectrum auctions as spectrum becomes available.” Hesse stressed that the network architecture Sprint is deploying is flexible enough to accommodate additional spectrum bands.
Walter Piecyk, analyst at BTIG Research, said Sprint projections for its 2.5 GHz buildout appeared to dial down earlier expectations. “Hesse’s disclosure that Sprint would target 100 million POP coverage of 2.5 GHz by the end of 2014 was definitive and new and certainly not a selective deployment of sites,” Piecyk wrote. “By our estimate, a deployment of 100 million POPs should get Sprint coverage in the top 25 markets, which is a solid start but is lower than the 130 million POP’s that Clearwire claimed to have previously covered.”