Ahead of 5G, Sprint Tweaks Backhaul & Spectrum Configurations
Sprint continues to plow ahead with plans to deploy 5G in a handful of markets in the coming months. And part of that effort appears to involve changes to its backhaul network (including canceling some of its existing backhaul contracts) as well as modifications its usage of the 2.5GHz spectrum band.
And while the details of the changes may not be, the reasons for Sprint's actions are clear: to be able to offer faster services through 5G.
Sprint's changes to its backhaul network were highlighted in the carrier's recent filing with the US Securities and Exchange Commission: "As part of the evolution of our existing network toward 5G, we plan to modify our existing backhaul architecture to enable increased capacity to our network at a lower cost by either negotiating lower vendor pricing for existing Ethernet technology or replacing Ethernet with fiber. We expect to incur termination costs associated with Ethernet contractual commitments with third party vendors ranging between approximately $150 million to $175 million, of which the majority are expected to be incurred by December 31, 2020."
Thus, Sprint is clearly working to bulk up its backhaul capabilities in advance of 5G, and is so focused on doing so that it might incur up to $175 million in charges related to canceling its existing Ethernet contracts.
A Sprint representative declined to comment on the situation beyond the operator's SEC filing, and so it's unclear exactly which Ethernet providers are involved in the situation and where in Sprint's network these changes are taking place.
Sprint isn't alone in working to widen its backhaul in order to accommodate increasing traffic on its network. Executives from Verizon, T-Mobile and other operators have made similar comments about the importance of suitable backhaul for 5G, including fiber. (See Can 5G Backhaul Itself?)
But backhaul isn't the only thing Sprint is focusing on. As pointed out by spectrum monitoring company Allnet Insights & Analytics, Sprint is also urging the FCC to let it use more spectrum in the 2.5GHz band for its mobile services.
Specifically, according to an application Sprint filed with the FCC, the operator is asking the agency for permission to essentially widen its transmissions into additional, unused portions of the 2.5GHz band. Sprint already runs much of its network traffic through its 2.5GHz spectrum licenses, but is asking the FCC to give it access to unused chunks of the band so that it can increase the number of its 20MHz LTE channels in the 2.5GHz band from two to three. "Adding an additional 20 megahertz-wide LTE channel at 2.5GHz to Sprint's network will greatly improve capacity and speed of its network and provide a more consistent and improved experience for Sprint's customers," the operator explained.
Interestingly, Sprint also told the FCC it would cease operations in the spectrum chunks if the commission decides to license that spectrum to others, and would also consider leasing the spectrum itself.
Sprint is asking for permission to test the spectrum design in Atlanta, and noted it has conducted similar efforts in New York, New Jersey, Pennsylvania and Florida.
Finally, it's worth noting there is one lever Sprint apparently isn't planning to pull: LAA. The operator has reportedly said that it is not using the technology to increase capacity, as Verizon, AT&T and T-Mobile are doing. LAA essentially expands LTE transmissions into unlicensed spectrum.
Sprint, for its part, plans to begin its mobile 5G rollout in the first half of 2019 in nine cities: Atlanta; Chicago; Dallas; Houston; Kansas City; Los Angeles; New York City; Phoenix; and Washington, DC. (See Sprint Gets 5G in Place for First Half of 2019.)
However, Sprint's executives have acknowledged that the operator faces an uphill battle in expanding its 5G offerings into additional locations. "To be sure, Sprint’s 2.5GHz spectrum will deliver very high speeds and support substantial capacity where we are able to deploy it, but due to the propagation characteristics of 2.5GHz spectrum, it would not provide a blanket of coverage outside of major metropolitan and suburban areas. Moreover, rolling out this more limited 5G network would require Sprint to invest $20-$25 billion in the next four years," Sprint's Marcelo Claure said in Congressional testimony in favor of the proposed merger between Sprint and T-Mobile, a combination he argued would create a nationwide 5G network. (See Fourteen Takeaways From the Sprint/T-Mobile Merger Hearings.)