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.