Sprint & Vendors Lagging on LTE Build?

Despite plans to launch its first six Long Term Evolution (LTE) cities soon, Sprint Corp. (NYSE: S) could be lagging in its wider build-out of a faster 4G network, an analyst at Jefferies & Co. Inc. noted on Wednesday.

"The carrier is undershooting vendors relative to prior forecasts on the Network Vision project," states analyst George Notter, citing industry contacts. He says the build-out was originally expected to start in the third quarter of 2011 but has been delayed several times and "vendors are seeing orders pushed" until early in the third quarter. Why all the delays? Notter explains it like this in a research note:

    As background on the Network Vision project, we note that Sprint gave their OEM vendors (Alcatel-Lucent, Ericsson, and Samsung) purchase orders for a specific number of cell sites. The OEMs were responsible for all the lease amendments, construction, and equipment end-to-end in their respective regions. The Network Vision delays came as Project Management activities have been very complex. Operational challenges and technical issues have also been problematic. Right now, the site acquisition work (primarily zoning and lease amendments) is very active in Sprint. Construction is slower however -- we're told that they're working on a fraction of the sites that they're doing site acquisition/lease amendment work on.

Notter expects that the remaining sites will go into construction "in the next few months." This could mean that spending will be "way up" at Sprint in the second half of the year as vendors finally fill the delayed orders. Sprint has said it expects to shell out up to US$6 billion on capex this year, thanks to Network Vision.

Why this matters
The LTE upgrade is a crucial part of Sprint's 3G and 4G network update. The carrier has said it hopes to cover up to 120 million possible customers with the data network by the end of 2012.

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— Dan Jones, Site Editor, Light Reading Mobile

gtchavan 12/5/2012 | 5:29:42 PM
re: Sprint & Vendors Lagging on LTE Build?

Verizon just add a ton more cities and by year end the goal of 400 cities in the U.S is achievable.    ATT is still struggling to pass 40 cities in coverage and no longer a contender in this space.   The question for consumer is, if iphone 5 comes this year, verizon is pretty much run away winner.

joset01 12/5/2012 | 5:29:42 PM
re: Sprint & Vendors Lagging on LTE Build?

iPhone 5/LTE this fall would fit with the way that Apple typically seems to time upgrades.

gtchavan 12/5/2012 | 5:29:42 PM
re: Sprint & Vendors Lagging on LTE Build?

Do you think with the fact that Verizon is so far ahead everyone else, will the introduction of iphone 5 be the bianary event that will force the others to spend to upgrade their networks to catch up or they all have enough people locked into their old plans and old phones that this event will pass by with no investment in any network (other than Verizon of course).  Does anyone have any data on what percentage of the customers in each carrier are locked in for 2 years (at anytime)?

joset01 12/5/2012 | 5:29:41 PM
re: Sprint & Vendors Lagging on LTE Build?

Well given the sales of iphone 4S we have to assume that a lot of people will have a year to run on their contract.

jggveth 12/5/2012 | 5:29:40 PM
re: Sprint & Vendors Lagging on LTE Build? If I live in a big city and mostly travel to big cities what do I care if T has 4G in Sheboygan?
joset01 12/5/2012 | 5:29:39 PM
re: Sprint & Vendors Lagging on LTE Build?

The hope is that by the fall they'll have a much much bigger LTE footprint. We'll have to see, right?

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