It hasn’t been easy, but Sprint believes it has turned the corner in its efforts to modernize its network. The carrier is now on track to achieve 200 million LTE-covered pops by the end of the year, officials said during the third quarter earnings call. The carrier currently has more than 26,000 Network Vision sites on air compared with more than 20,000 reported in second quarter results.
Dan Hesse, Sprint CEO, joked that the Network Vision project is like the last pig’s brick house in the “Three Little Pigs” fable.
“It has been a very complex undertaking,” he said. “It has been very hard work to take down the Nextel network and rip out and replace the entire Sprint 3G network. We are finally turning the corner on this massive project and can see the light at the end of the tunnel.” Hesse added that the carrier will experience Network Vision construction pressures until mid-2014.
Network Vision is a flexible platform that is capable of running LTE in three spectrum bands with the network architecture to add more frequencies in the future.
Steve Elfman, Sprint president, network, technology and operations, said that construction is complete or underway on more than 35,000 sites, which is 90 percent of the carrier’s sites. LTE has been launched in 230 markets so far.
Sprint’s plan to build a multi-band LTE network includes the 1.9 GHz band, overlaid by 800 MHz and 2.5 GHz frequencies. Modernization of the 1.9 GHz network is expected to be completed by mid-2014.
“We expect to use a capital efficient mix of various bands depending on geography and capacity needs,” Elfman said.
Sprint continues to free up 800 MHz frequencies following the Nextel shutdown, which improves network performance. The carrier began voice service on the 800 MHz band in the first quarter and now has sites on the air in two-thirds of its markets.
“We also have 40 percent of our customer base using 800 MHz voice-capable handsets,” Elfman said. “We are starting to turn up 800 MHz LTE radios in markets where we have spectrum rebanding complete.”
The third layer of the network will be 2.5 GHz spectrum, which Sprint acquired from Clearwire. It will be deployed in urban markets initially. Sprint expects to cover 100 million pops with 2.5 GHz by the end of 2014.
“Our approach will be to densify the urban markets first to get the speed and capacity in those areas, eventually moving nationwide,” Elfman said. “We plan to be very aggressive next year in our [2.5 GHz] deployment, not only with our Clearwire build but with our own sites, macro and smaller.”
Sprint Spark Springs Forward
Late in October, Hesse announced the future rollout of “Sprint Spark,” which will be capable 50-60 megabits per second peak speeds today with the potential of more than 2 gigabits per second per sector of over-the-air speed.
Sprint plans to deploy Sprint Spark in about 100 of top metro areas during the next three years, with initial availability are New York, Los Angeles, Chicago, Tampa and Miami. Sprint expects to cover 100 million pops with Sprint Spark by the end of 2014.
Sprint Spark achieves its speed by combining 4G FDD1-LTE at 800 MHz and 1.9 GHz and TDD1-LTE at 2.5 GHz spectrum, TDD-LTE technology (2.5GHz), and carrier aggregation in the 2.5GHz band. These spectrum assets, technology and architecture are designed to deliver a seamless customer experience via tri-band wireless devices. The tri-band devices will support active hand offs between 800 MHz, 1.9 GHz and 2.5 GHz, allowing data session continuity as the device moves between spectrum bands.
The first smartphones with Sprint Spark capability are scheduled for customer availability this month.
Wells Fargo analysts met with Sprint senior management and investors at its Kansas headquarters at the end of August and came away feeling the overwhelming presence of SoftBank, which paid $21.6 billion for a 72 percent stake on July 10.
“A consistent message was that both SoftBank and Sprint are focused on building a world class wireless network and company,” Jennifer Fritzsche, Wells Fargo senior analyst wrote in and equity research note. “The discussion at Sprint has clearly shifted from doing the least expensive option to a focus on aggressive network growth and expansion.”
Sprint’s spectrum holdings at 2.5 GHz and the Softbank relationship are crucial to competing in the LTE race, according to Dan Hesse, Sprint CEO, said during the carrier’s second quarter earnings call at the end of July.
“The Softbank transaction brings us capital and expertise that can accelerate our turnaround,” Hesse said. “We believe, with the combination of our existing network modernization efforts, the addition of the complementary Clearwire spectrum, and scale from the Softbank transaction, we can over time build a powerful network and a much stronger competitor.”
Sprint’s 2.5 GHz deployment has been slowed by DISH’s bid for Clearwire and will be pushed from late 2013 to 2014, Hess told the analysts.
“Sprint cited many examples of tangible network improvement it is seeing in areas where LTE/Network Vision has been launched (i.e. Chicago) but it does not expect to make a big marketing push on a national level until sometime next year,” Fritzsche wrote.
At the time the sale was closed with Sprint, Clearwire had 2,000 TD-LTE sites commissioned and a number of others under construction, which will become part of the Network Vision system in the second half of 2013.
“The hope (and plan) is that Sprint will have network parity vs. its peers in 2014 and a network advantage in 2015,” Fritzsche wrote.
Sprint launched a Novatel Wireless handset in July, which uses 2.5 GHz, as well as the 800 MHz and 1.9 GHz bands.
“As it relates to expanding LTE on 2.5 GHz, the Sprint Network plan will be to add the 2.5 gigahertz radios to our network to increase capacity and performance for our customers. And we expect to start seeing tri-band LTE smartphones later this year,” Steve Elfman, president, network operations and wholesale, said on the earnings call.
During the second quarter earnings calls, LTE deployment was on the lips of several major carriers as they seek to catch up with Verizon Wireless.
T-Mobile US is pushing forward with its LTE upgrade and HSPA+ build out, and it has doubled its MetroPCS brand presence to 15 new markets. The carrier, which launched its LTE network in seven major metropolitan areas in March, lit up 116 Metro areas covering 157 million people with LTE by the end of July, exceeding its midyear goal of 100 million. The company is also still building out its HSPA+ network, which now covers 228 million people on AWS spectrum and 108 million in 1900 band.
“We have hugely accelerated the modernization and upgrading of our network to 4G LTE,” John Legere, president and CEO, told the second quarter earnings call. More than 200 million covered pops are projected to receive LTE by the end of 2013.
Also during the quarter, the carrier purchased of US Cellular’s spectrum covering 32 million POPs in cities such as St. Louis and Kansas City, Mo.; Nashville; Memphis, Tenn.; and New Orleans.
“Our coverage spectrum position is improving. The [US Cellular] spectrum is adjacent to our current holdings which provide key network efficiency benefit,” Legere said. “Further, due to the spectrum position and our network deployment program … we are on track to achieve 20×20 megahertz 4G LTE coverage in 90 percent of the top 25 market in 2014 and beyond.”
Additionally, T-Mobile is moving forward with the integration of MetroPCS, completing the planning and beginning the implementation of the network migration. So far, it has launched HSPA, HSPA+ and LTE in multiple MetroPCS markets and expects to complete the launch in all existing markets by the end of Q3. The implementation of multi-operator core network allows MetroPCS customers with LTE handsets to use T-Mobile 4G LTE network for data without a change in handset.
AT&T LTE Growth ‘On Track’
AT&T currently covers more than 225 million people with LTE and is on track to reach nearly 270 million pops by year end covering 400 markets.
“We continue to move fast with our 4G LTE deployment. We now expect to substantially complete our 4G LTE network by the next summer,” Ralph de la Vega, president and CEO for AT&T Mobility, told a second quarter earnings call.
AT&T bumped up its CapEx $900 million year over year to $5.5 billion in the second quarter.
“We spent that money at this time, because the network team could get more done and efficiently get it done and so we want to make sure we fund that and we will stick to that philosophy,” de la Vega said.
Network Vision Momentum Continues
While shutting down the Nextel platform, Sprint made progress on the Network Vision deployment in the quarter, completing 6,500 sites for a total of 20,000. LTE has been launched in 151 cities, including Los Angeles, Dallas, Atlanta, Miami and Boston. Sprint expects to provide 200 million people with LTE by the end of 2013.
“Momentum continued in the second quarter and expanding the Network Vision footprint we now have zoning complete on nearly 35,000 sites and leasing complete on close to 34,000. More than 30,000 sites are ready or have already begun construction. There are 600 cities under construction,” said Steve Elfman, Sprint president of network operations and wholesale.
Another significant milestone in the evolution of Network Vision is the closing of both the Midwest spectrum acquisition from U.S. Cellular and the acquisition of Clearwire. The U.S. Cellular transaction brought 20 megahertz of PCS spectrum in Chicago and its surrounding markets and 10 megahertz of PCS spectrum in the St. Louis market. Sprint has already begun to deploy LTE on the acquired spectrum and we’ll continue to do so through the third quarter of next year.
“With regard to Clearwire, we’ve been actively engaged with them to build both a network integration plan as well as the integration of all functions into Sprint,” Elfman said. “As it relates to expanding LTE on 2.5 gigahertz, Clearwire had roughly 2,000 TD-LTE sites commissioned at the time of closing and expect these and additional sites under construction to continue coming on air in the second half.
Future LTE Growth Looks Good Too — Moody’s
Tower companies will get a nice boost from Sprint’s purchase of its subsidiary Clearwire Corp. through upgrading existing cell sites and adding sites to achieve nationwide LTE coverage, according to Moody’s Investors Service in the report “Independent Towers Will Get an EBITDA Boost As Sprint Deploys Clearwire Spectrum.”
“We expect that Sprint will repurpose the Clearwire tower sites and add an estimated 15,000 to 18,000 cell tower sites, which will generate increased leasing revenue that the carrier pays to the tower companies,” says Moody’s Vice President — Senior Analyst Gregory Fraser, the author of the report. “These new tower sites will replace the 16,500 Clearwire sites scheduled to be decommissioned and will therefore eliminate the risk that lost rent from those towers would not be replaced with new rental revenue.”
Moody’s expects AT&T to further its 4G/LTE deployment on Leap’s underutilized spectrum on 15,000 to 20,000 sites (including the 9,700 leased sites acquired from Leap), which will also to the benefit of the independent tower firms.
Even with weather hindrances, such as Superstorm Sandy, Sprint nearly doubled the number of sites in its Network Vision sites on air in the last 90 days, with more than 8,000 sites in 58 cities, according to the fourth quarter 2012 earnings conference call.
LTE services are expected to commence in nearly 170 more expected in coming months, construction has been started in more than 450 cities and more than 19,500 sites are now ready for construction, a 45 percent increase compared with the third quarter, according to Steve Elfman, president, Sprint network operations.
“In the fourth quarter, average new sites on air per week grew 83 percent from the third quarter,” he said. “We have zoning complete on 29,000 sites and leasing complete on 27,000 sites, a 34 percent increase over Q3 for both.”
Average downlink and uplink speeds are in the range of 6 to 8 megabits per second for downlink and 2 to 3 megabits per second for uplink, according to Elfman.
“We are also very pleased with the performance we are seeing on LTE sites we have on air,” he said. “We expect this performance to improve as we bring full site clusters on air and continue to tune the network.”
Progress on the Network Vision is the result of increased investment at Sprint Nextel. The carrier is beginning the second year of the investment phase its turnaround, which includes building a new network platform and eliminating duplicative network cost structure.
“We are committed to deploying Network Vision as quickly as we can, said Dan Hesse, Sprint Nextel. “We doubled our wireless capex year over year as we deployed this leading edge network.”
Capital expenditures for the fourth quarter were more than $1.9 billion, including $1.3 billion of Network Vision capital. Network Vision capital was up 24 percent sequentially as the build continues to gain momentum, according to Joseph Euteneuer, chief financial officer.
And the money will continue to flow into infrastructure in 2013. In the first two quarters of 2013, total capex is expected to be at a similar or higher than fourth quarter 2012, Euteneuer said.
“We believe that the faster we can deploy the capital and higher standards we can deploy in the network architecture the better off we will be,” he said. “Including some delays spend from 2012 coming into 2013, these areas will contribute to heightened capital spend in 2013 while we believe will help us move more quickly towards becoming a stronger and more competitive company.”
Jennifer Fritsche, senior analyst, Wells Fargo, applauded Sprint’s capex spend plans, which would amount to $3.8 billion in the first half of 2013.
“Big capex number yes. But now is time to spend,” she said. “We believe it is smart for the company to spend this now in an effort to make it competitive with its larger peers.”
Of course, capex spend in the second half 2013 will be affected greatly by the result of the Softbank’s attempt to infuse $20 billion into the carrier.
With an estimated 600,000 to 800,000 people expected to attend this week’s inauguration of President Obama, carriers completed exhaustive system enhancements to prepare for the influx of people.
Final preparations for Sprint included deploying three cell sites on wheels (COWs) at key locations on the National Mall and installing in-building repeaters at the Capital Hilton hotel, the Washington Marriott Wardman Park hotel, and The Mayflower Renaissance Washington D.C. Hotel to boost wireless coverage. Sprint has been preparing for the inauguration since April 2012, boosting wireless voice capacity by 25 percent and increasing data capacity by 37 percent for numerous cell sites around the National Mall and the downtown area.
AT&T has spent $4 million beefing up capacity along the parade route. Nine COWs were deployed, which will increase capacity on the Mall by 200 percent. In-building systems have been upgraded and temporary rooftop antennas have been implemented with high-power amplifiers along the inaugural parade route, according to a report in the Washington Business Journal.
In total, AT&T spent $850 million on wireless infrastructure in the Washington area in the last four years. Between the last inauguration in 2009 and the end of 2011, Sprint invested $300 million in its wireless network in the Washington, D.C. market. Not much has been released about Verizon Wireless’ inaugural wireless preparations, but in 2010 the carrier did turn on its LTE network in Washington, D.C., which increased speeds 10X.
Sprint’s Emergency Response Team (ERT) is also assisting public safety communications, supplying a satellite cell site on light truck for dedicated wireless network coverage, as well as interoperability among private radio networks completely independent of the local power, telephone, and terrestrial IP infrastructure.
Additionally, ERT will provide Direct Connect handsets and services to first responders for redundant, interoperable communications between the various agencies. Law enforcement personnel will also be given access to remote, high-bandwidth satellite IP data services and GPS tracking systems will be available for ambulances and para-transit vehicles.
Since its creation, Sprint’s ERT has conducted more than 5,200 deployments, and provided emergency wireless support for more than 1,250 events.