J. Sharpe Smith —
Another piece of the puzzle fell into place in Sprint’s quest to merge with T-Mobile this week, as the carrier’s majority owner Deutsche Telecom AG agreed to Sprint-owner Softbank’s plan to buy T-Mobile for a price tag of $32 billion, according to published reports.
The hook up with T-Mobile may be needed now more than ever, according to research by RBC Capital Markets, which reports that Sprint’s network modernization progress has stalled since February.
“Our ongoing monitoring of Sprint’s network upgrades indicate that overall progress has been slow on both voice- and data-related cell-site improvements since February,” RBC analyst Jonathan Atkin wrote. “However, there has been some incremental progress in data speed upgrades, particularly in the Spark markets (e.g., 75 data speed upgrades in New York versus February).” New York topped Sprint’s network upgrade list with 1,332 data speed upgrades, 32 data capacity upgrades and 21 voice upgrades, followed by Los Angeles with 1,009 data speed upgrades, 3 data capacity upgrades and no voice upgrades.
However, RBC is seeing increased activity in the 2.5 GHz band at Sprint as the 8T8R LTE equipment starts to ship.
Perhaps as a result of the slow progress of Sprint’s network upgrades, subscribers’ perceptions of its networks have suffered. Its voice score of -26 percent was the worst among the national carriers, and was down 9 percent from the previous survey results from January 2014, according to RBC’s research.
“Sprint also trailed its peers, which posted net negative scores in the single digits,” Atkins wrote. “Of note, we found that respondents in Sprint’s Spark markets reported worse network performance for both data and voice quality (18 percent and 29 percent net negative scores, respectively) versus respondents in non-Spark markets (9 percent and 22 percent net negative scores). Our previous survey of Spark versus non-Spark markets had shown an incremental improvement in Spark markets.”
Atkins noted in an interview with AGL Link that the pairing of Sprint and T-Mobile has some nice synergies for the latter’s sites in urban areas.
“Sprint’s 2.5 GHz spectrum position, coupled with the urban/metro focus of T-Mobile’s transmission locations, suggest to us that Sprint, upon consummating a merger with T-Mobile, would add 2.5 GHz LTE equipment at T-Mobile sites, rather than remove gear, in order to meet its network density requirements,” Atkins said.
Now Sprint and T-Mobile just need to convince the government that having just three national carriers is sufficient for wireless competition. That may be easier said than done.
J. Sharpe Smith is senior editor, AGL Link.