October 1, 20115 — Sprint’s decision to not participate in the 600 MHz incentive auction and to depend on its existing spectrum holdings sent waves through the wireless industry this week. While possibly bad news for the FCC ‘s spectrum revenues, the move may have a positive effect on the carrier’s financial position and its network build.
“Sprint’s focus and overarching imperative must be on improving its network and market position in the immediate term,” said Sprint CEO Marcelo Claure in prepared release. “Sprint has the spectrum it needs to deploy its network architecture of the future.”
The carrier also holds a varying amount of spectrum at 1.9 GHz – from 30 megahertz up to 50 megahertz per market. But generally, it has an average of 55 megahertz of 1.9 GHz and 800 MHz spectrum. In many markets the sum of its 800 MHz, 1.9 GHz and 2.5 GHz spectrum totals from 180 megahertz to 200 megahertz, according to a company spokesman. Sprint has more spectrum than any of the four national carriers.
Sprint has started what it calls “a major effort to increase coverage and capacity,” increasing the number of its cell sites. An example is its deployment of a tri-band carrier aggregation using spectrum in the 2.5 GHz, 1.9 GHz and 800 MHz band.
Sprint’s decision to sit out the broadcast incentive auction is positive for T-Mobile, because it will face less competition for the 30 megahertz of reserve spectrum. The news is not so good for the FCC and its goal of raising $80 billion in auction bids, according to Jennifer Fritzsche, senior analyst, Wells Fargo Securities.
Sprint averages 14 megahertz of 800 MHz spectrum nationwide. While Sprint has less coverage than its competition, its agreements with the 27 rural operators are helping bridge this low band coverage, according to Fritzsche.
“The quick takes on the implications of this move are mixed for Sprint, which now has to show results with its network but removes the overhang question of how it would finance the spectrum,” Fritzsche wrote. “We believe Sprint also had serious concerns about the lack of plug-and-play use of this spectrum given expected clearing delays of up to five years,”
August 20, 2015 — One of the best ways to feel the pulse of a segment is to see who’s spending money on it. While Wi-Fi is taking some time to deploy, the industry is showing some promising financial and strategic data.
A couple of examples include the deals that iPass and Devicescape; and Boingo and Sprint just Inked. The iPass and Devicescape deal is for Wi-Fi roaming hotspots. Supposedly, this will create the “world’s largest commercial Wi-Fi network,” with 50 million hotspots. Under the new agreement between the two companies, iPass is essentially combining its aggregated Wi-Fi network with Devicescape’s aggregated Wi-Fi network, thereby more than doubling the number of hotspots iPass currently offers.
On a side note, it is interesting that iPass is a pay for service model (although, perhaps there is a value to real Wi-Fi roaming).
Sprint’s deal is a multi-year Wi-Fi offloading agreement with Boingo to offload, seamlessly, its customers’ data traffic to Boingo’s Wi-Fi networks at 35 major U.S. airports. This seems to be in line with Sprint’s evolving strategy to make Wi-Fi an integral part of its network as part of an effort to improve network performance.
These are real signs, not “intends to” or “is in talks with” or “is looking at” types of the diatribes we hear so often. As they say, put your money where your mouth is.
August 20, 2015 — There is some real movement on the small cell front. Someone other than a vendor is hyping small cells. The industry is gearing up. And hopeful vendors are now expecting a carrier to deploy.
The reason is that small cells are expected to be the primary focus of Sprint’s network upgrade. Macro network upgrades are on the back burner perhaps until after the next spectrum auction. The carrier is bullish on rolling out up to 70,000 outdoor picocells.
And why it may work is because Softbank, which owns 78 percent of Sprint, has already deployed a small cell network in Japan. The company’s hyperdense network uses cloud-controlled base stations no bigger than a suitcase, packing in as many as 150 nodes per square kilometer in Japan’s largest cities. Softbank has also installed thousands of small cells on post offices throughout rural Japan, using satellite backhaul. They want to try this here. We’ll see.
Small Cells (and C-RAN?) in San Fran
My position on small cells has always been that they will play various roles in networks. But it is still a small cell. And in that vein, Verizon Wireless said it negotiated the right to place small cells on 400 San Francisco light poles and utility poles by moving “the brains of the network” to remote locations. Shades of C-RAN. While it isn’t exactly C-RAN, it is close enough for government work.
“What’s unique to this deployment for the United States, is that it’s going to be a C-RAN-type configuration,” said Jake Hamilton, engineering director for Verizon Wireless’ Northern California region. “Our baseband units, or the brains of our network, will be remotely housed in hub locations, and we use dark fiber to connect out to the city … poles on the streets. That really allows us to minimize how much equipment we put on the poles, which was kind of a requirement from … the planning department.”
And finally, Huawei expects to ship 400,000 small cells this year. Huawei expects small cells to play a key role in the future “4.5G” and “5G” network deployments. It is the fastest-growing segment of the company’s business. According to Huawei, the increasing demand for small cells will make the small cell business grow by 18 times in terms of revenue by 2020.
That is promising.
May 14, 2015 — The words “massive densification” of a cellular network are enough to make any wireless infrastructure provider salivate. And when they came from lips of Marcelo Claure, president and CEO of Sprint, during fourth quarter 2014 earnings call, it sounded really good. But the issues surrounding cash burn and sinking revenues continue to cause concern among analysts about the carrier’s financial health.
The head of Sprint discussed increasing the macro, small and even Wi-Fi sites across its entire spectrum holdings as it transitions to VoLTE. The carrier has issued RFPs to vendors and Claure reported “significant potential savings compared to our Network Vision pricing.”
Sprint is finalizing its plan for a long-term next-generation network predicated on deploying a lot more infrastructure in its network.
“The only way you’re going to get the true outcome or you’re going to be able to truly unload the value of the rich spectrum that we have is by massively densifying our network,” Claure said. “And where we are right now is trying to figure out what is the right combination between macro sites and between small cells.”
Additionally, Sprint will add Wi-Fi as a complementary layer to its network, supporting Wi-Fi calling on 27 devices. It has entered into a relationship with Boingo, which enables Wi-Fi roaming and connectivity in 35 major U.S. airports.
“Sprint continues to clearly be focused on the network improvement – and has seen some third party results verifying its progress,” wrote Jennifer Fritzsche, senior analyst, Wells Fargo. “Focus continues as management indicated it is in the final stages of engineering the network densification plan (i.e.: mix of macro sites and small cells). We believe Sprint should continue to see positive movements in the right direction.”
Sprint forecast accrued CapEx is going to be about $5 billion in fiscal 2015, which is targeted at 2.5 GHz deployment. Fritzsche was looking for form visibility into the carrier’s network investment plan, however.
“In a somewhat surprising move, Sprint provided limited FY2015 outlook, and capex was viewed as more of a disappointment considering an expected announcement of a major network overhaul did not come,” Fritzsche wrote.
Questions About Sprint’s Financial Picture
Even as Sprint makes big deployment plans, some analysts question the finances of the big four carrier. Everyone has seen the commercials where spokesman Kevin Durant cuts your cellular bill in half, and that has led to increased users, but lower revenue per user. Service revenue for the fourth quarter was down 9.4 percent to $7.14B and equipment revenue was up 14.5 percent to $1.14B.
“Sprint reported mixed FQ4 2014 results, in our view, as revenue came in light of our estimates but EBITDA beat,” wrote Fritzsche. “The company reported subscriber additions that were better than expected, though still resulted in a loss of postpay phone customers that were more than offset by tablet additions.”
And then there is the issue of cash burn. Cash capex was $2 billion in the fourth quarter, compared with $1.5 billion year over year, partly because of the 2.5 GHz build out. Free cash flow was negative $914 million for the quarter compared to negative $1.1 billion year over year.
Sprint officials assured stock analysts that the liquidity was not an issue for concern. Sprint ended the quarter with a total liquidity position of $7.5 billion including cash, cash equivalents and short-term investments of $4.2 billion as well as $2.8 billion of undrawn borrowing capacity under its revolving bank credit facility and $500 million of undrawn capacity under its service receivables financing agreement at the end of the quarter.
Information in the article courtesy of Seeking Alpha.
September 10, 2014 — John Saw, Sprint chief network officer, discussed the challenges the carrier has faced with its NetWork Vision build out and the opportunities that it represents for expanding its tri-band LTE network, during a keynote conversation with Berge Ayvazian, analyst with UBM, at the 4G World/Tower and Small Cell Summit on Tuesday.
“We have a lot of spectrum at 2.5 GHz. In our build out at 2.5 GHz, we will target the areas with the most usage, so you will see a lot of 2.5 GHz in the metro and suburban areas. We eventually will add 2.5 GHz to all of our existing cell sites, except in the rural areas where we don’t need capacity,” Saw said.
Sprint has set a target to cover 100 million pops with 2.5 GHz by the end of 2014, which will complement its current LTE footprint of 255 million pops.
“We are adding 2.5 GHz TDD to every cell site, which means we will hiring tower crews and paying more rent on the structures. That is a major build for us. It involves running a CPRI cable up the tower to the radio which is installed behind the antenna,” Saw told AGL Live after the presentation.
Sprint’s approach was unique in that it did not overlay existing networks with LTE, choosing instead to completely rebuild the network, which should help differentiate it from the other carriers, according to Ayvazian.
“We bit the bullet. It was painful. It had to be done because for years Sprint has under-invested in its network. So the decision was made to rip and replace it with a multimodal platform,” Saw said. “We ran into a lot of challenges. NetWork Vision is a multi-year program. I am happy to say that we are coming to the conclusion of it. What we have in front of us is a brand new platform on which we can add new capabilities such as Sprint Spark.”
Sprint is saving money on the increase efficiency of the new equipment alone, Ayvazian noted. The new equipment takes up less space and has a lower carbon foot print.
“It is a scalable, flexible network that will allow us to easily add frequencies and radios, as well as to engage in network sharing,” Saw said.
Sprint is building a tri-band LTE network. The baseline LTE layer for the Sprint network is at 1.9 GHz and now with the shutdown of the iDEN network, it is being expanded to 800/900 MHz. With the use of Clearwire, it is being expanded to the 2.5 GHz band.
“I call it the wedding cake. We have 800/900 MHz (10 megahertz) for coverage. 1.9 GHz (10 megahertz) is a workhorse layer that is great for roaming. Both are FDD, and 2.5 GHz (120 to 160 megahertz in the top markets), which is TDD, for capacity and performance,” Saw said.