In the wake of the failed Sprint/T-Mobile merger, the wireless infrastructure industry may experience a resurgence in Sprint’s network buildout similar to the rebirth of T-Mobile after it marriage to AT&T was nullified. In fact, Sprint has a multiple-prong plan for growing its wireless infrastructure that will enhance capacity and throughput, Tarek Robbiati, the CFO of Sprint, told an audience at the UBS Global Media Communications Brokers Conference in New York City this week.
Sprint’s network rollouts will include tri-banding a majority of its towers to operate in the 800 MHz, 1900 MHz and 2500 MHz bands.
“We have not rolled out 2500 MHz in full across our footprint. We’ve rolled it out roughly on 50 percent of all the towers covering 70 percent of our pops,” Robbiati said in a SeekingAlpha.com transcript. “We know that when we deploy 2500 MHz, the experience that our customer witness is much, much better than when we don’t. So that is number one, the focus on network deployment.”
Sprint is also going to roll out “a few thousand towers,” to increase its coverage in neighborhood. “Our network footprint is probably in need of an expansion in some specific neighborhoods where we feel we are a little bit short,” Robbiati said.
Additionally, the carrier plans to deploy massive multiple-input, multiple-output (MIMO) radio systems that will involve 64 transmission element and 64 receive elements.
“I don’t think any other player will do it to the same extent that we will, we are going to be aggressively rolling out MIMO as part of the tower upgrades and neighborhood expansions,
Robbiati said, “and that helps really drive spectrum efficiency to the next level and increase our capacity by a factor of 10x.”
Sprint’s increase in capex will boost in small cell densification, combining mini-macros in right of way and air strands with its business/residential Magic Boxes, which were launched in spring of 2017.
“We will be spending $5 billion to $6 billion next year in deploying our network,” Robbiati said. “You could expect that probably for a couple of years we would be at around that level, but then we will come back down from that level to a more sustainable CapEx-to-sales ratio and a $4 billion to $5 billion of CapEx spend per year.”
Cable companies have alway been thought to be a factor in the wireless world with their embedded backhaul and and ready-made customer bases. But for one reason or another their promise has not become a reality, until now, perhaps.
In the wake of the failure of the T-Mobile-Sprint merger, Sprint announced an infrastructure partnership with Altice USA, a French company that purchased Cablevision and Suddenlink in 2015 to become the fourth largest U.S. cable company. The use of Altice USA’s fiber network will reduce Sprint’s backhaul costs.
Sprint officials said the deal had been in the works for six months and was not contingent on the completion of the T-Mobile merger, according to Sprint Chief Financial Officer Tarek Robbiati.
The agreement creates reciprocal access between the two companies’ networks. Altice USA will resell minutes as an MVNO on the Sprint network, while Sprint will be able to use Altice USA’s fiber network to backhaul its densified small cell network. The “infrastructure swap” was the first of its type, according to Robbiati.
“We have not seen enormous progress outside of Sprint in terms of densifying networks, which is key to the 5G future not just of Sprint but the whole country,” Robbiati said. “We have created a platform to do just that with several thousand small cells that we will be able to deploy.”
Sprint’s deal with Altice USA is part of the same strategy that led to a joint venture (http://www.aglmediagroup.com/lendlease-softbank-tower-jv-to-buy-8000-tower-rooftop-sites/) between Softbank Group (owner of Sprint) and Lendlease Group to buy 8,000 tower and rooftop sites. Both agreements further Sprint’s goal of densifying its network within its footprint.
“The priority is to significantly upgrade our existing footprint in terms of towers, parallel to densifying our [small cell] networks in our footprint, which covers the vast majority of the country,” Robbiati said.
During Sprint’s Q3 earning call, Softbank CEO Masayoshi Son said the carrier would increase its capex spend $3.5 billion in 2017 up to $5-6 billion in the medium-term.
“It is important that we invest in our network but also that the investment is really geared toward densifying our footprint,” Robbiati said. “The [Altice USA] agreement lowers the capital intensity of our buildout because we are literally sharing infrastructure between the parties. As well as giving us the ability to quickly deploy infrastructure at a minimal capital level, it is a wonderful opportunity to keep our network opex under control.”
Sprint is interested in solving the cable/MVNO model, he said, and is open to a similar agreement with other cable operators.
Altice USA provides broadband, pay television, telephone, Wi-Fi hotspot access, proprietary content and advertising services to 4.9 million residential and business customers across 21 states, including Arizona, Arkansas, California, Louisiana, Missouri, North Carolina, Oklahoma, Texas, West Virginia, New York, New Jersey, Connecticut and Pennsylvania.
J. Sharpe Smith is Senior Editor of the AGL eDigest. He joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 27 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with Phillips Publishing, now Access Intelligence. Sharpe Smith may be contacted at: email@example.com.
In a short, one paragraph statement, John Legere, president and CEO of T-Mobile US, put to rest years of negotiation and speculation, as he pronounced the proposed T-Mobile/Sprint merger dead.
“The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record,” Legere said. “Going forward, T-Mobile will continue disrupting this industry and bringing our proven Un-carrier strategy to more customers and new categories – ultimately redefining the mobile Internet as we know it. We’ve been out-growing this industry for the last 15 quarters, delivering outstanding value for shareholders, and driving significant change across wireless. We won’t stop now.”
Masayoshi Son, chairman and CEO of Softbank Bank Group and Chairman of Sprint, had some explaining to do about the breakdown of the T-Mobile/Sprint merger talks yesterday during the company’s second quarter fiscal year 2017 earnings presentation. It seems that the talks, which dragged on for years, hinged on one key point. Control.
Son and the Softbank board of directors were hoping that the two companies would be equal partners, but T-Mobile wanted to keep management control of the resulting merged company.
“If we gave up control of Sprint, in five or 10 years, we would regret it,” Son said. “We want to maximize profit [in Sprint] while maintaining control.”
Speaking in front of a slide with a map United States with “Most Important Market” over it, Son made it clear that Softbank was not moving away from interest in Sprint. In fact, he announced the company’s investment in the carrier would be increased to 85 percent.
“The United States is the biggest market in the world,” Son said. “Now that we have a good base of our business built up in the United States, it should not be let go.” Even though in the short-term Sprint’s share price or Softbank’s share price may drop because of the failed merger, it may actually good for Softbank as it buys up Sprint’s stock.
Softbank, which has a semiconductor subsidiary that will deliver a trillion chips designed for IoT devices in the next 20 years, plans to take advantage of that expertise to compete in the U.S. machine to machine communications market.
“AT&T and Verizon have a dominant market share of [smart phone users]. They are ahead of us by a long way. It is not easy to exceed their base, without merging with T-Mobile,” Son said. “When it comes to IoT, we may be far advanced than the other carriers, because of our acquisition of Vodafone K.K. that established a business alliance with Yahoo! JAPAN in 2006.”
At Mobile World Congress Americas, Sprint and Ericsson announced the results of the first U.S. 2.5 GHz Massive MIMO (multiple input, multiple output) field tests conducted in Seattle, Washington and Plano, Texas using Sprint’s spectrum and Ericsson’s 64T64R (64 transmit, 64 receive) radios. The two companies are preparing for commercial deployment next year, with Massive MIMO radios capable of increasing Sprint’s network capacity up to ten times.
Dr. John Saw, Sprint CTO, said, “Massive MIMO is a tremendous competitive advantage for Sprint, enabling us to maximize our deep 2.5 GHz spectrum holdings.”
Testing of Massive MIMO on the Sprint LTE Plus network in downtown Seattle showed a capacity increase of approximately four times compared to an 8T8R antenna. To showcase this capacity, Sprint convened 100 people with Samsung Galaxy S7 phones and ran simultaneous file downloads on a timed-test on all networks. The testing showed a 100 percent success rate on the Massive MIMO-powered Sprint network.
In Plano, Texas, Sprint and Ericsson also recently tested Ericsson’s 64T64R Massive MIMO radios reaching peak speeds of more than 300 Mbps using a single 20 MHz channel of 2.5 GHz spectrum.
For both field trials, Ericsson provided the radio network infrastructure and backhaul equipment. Sprint and Ericsson together developed the test cases and requirements, which included a variety of performance scenarios involving multi-user and non-stationary testing. The Radio Network infrastructure included Ericsson’s next-generation 5G-ready AIR6468 radio, and the backhaul equipment utilized the MINI-LINK 6352 R2 microwave radios which can provide up to 10 Gbps of backhaul, future proofing the network for 5G.