In addition to completing Network Vision, which is set for mid-2014, Sprint has commenced deploying LTE technology on its 800-MHz spectrum and has set out a plan to deploy LTE on some of its Clearwire sites and to decommission others, according to the annual SEC filing, dated Feb. 16, of the carrier.
At the time of the Sprint acquisition, Clearwire had WiMAX technology deployed on 17,000 cell towers and was in the process of deploying LTE technology on 5,000 of these sites, which has been completed. Sprint plans to expand LTE deployment to 5,000 more Clearwire sites and to decommission 6,000 redundant sites.
“We expect to decommission and terminate the underlying leases. We expect lease exit costs recorded in future periods associated with these sites to range between $50 million to $100 million on a net present value basis,” Sprint wrote. The WiMAX system will be turned off by the end of 2015.
The majority of the LTE roll out in the 800-MHz and 2.5-GHz spectrum bands is to be completed by the end of 2015. Sprint will introduce its Spark Tri-band (800 MHz, 1.9 GHz and 2.5 GHz) phone to correspond with the multi-band LTE roll out. The overall network modernization effort consolidates and optimizes all of Sprint’s spectrum into each base station. The Network Vision project commenced in late 2011 and includes the deployment of enhanced 3G and 4G LTE technology at the carrier’s 38,000 sites.
“The cost to complete these initiatives to modernize our network will be significant. We expect capital expenditures of approximately $8 billion in 2014,” the carrier wrote.
Additionally, Sprint is modifying its existing backhaul architecture to increase the capacity and lower the cost by using Ethernet as opposed to our existing time division multiplexing (TDM) technology.
“We expect to incur termination costs associated with our TDM contractual commitments with third-party vendors ranging between $175 million to $225 million, the majority of which we expect to record through the first quarter of 2016,” the carrier wrote.