"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.
- Sprint to Launch LTE Service Soon?
- Sprint LTE Devices Arrive Before Network
- Sprint's 4G LTE Texan Triangle
- Sprint Needs $3B to Fufill Its 'Network Vision'
— Dan Jones, Site Editor, Light Reading Mobile