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5G

Shentel Follows Sprint Into Massive MIMO & 5G

Shentel, a Sprint affiliate that counts roughly 1 million wireless customers, says it plans to deploy Massive MIMO technology as well as testing 5G this year.

Shentel disclosed the news during its recent quarterly earnings call with investors, though company officials didn't provide many additional details around the actions. Shentel execs said the company is generally working to improve its wireless network by deploying 2.5GHz spectrum and LTE Advanced features like 256 QAM and carrier aggregation. They added that Shentel is also working to improve its backhaul connections.

Shentel's embrace of Massive MIMO, and its plan to test 5G, doesn't come as much of a surprise, but it does signal Shentel's willingness to follow Sprint's lead into more advanced wireless technologies. Sprint, for its part, plans to launch 5G in nine cities in its 2.5GHz spectrum this summer across a total coverage area of more than 1,000 square miles.

And in 5G, Shentel joins U.S. Cellular as another regional wireless network operator that is moving toward the wireless industry's next-generation technology; U.S. Cellular recently announced plans to deploy 5G this year with vendors Ericsson and Nokia.

Shentel counted just over 1 million wireless customers at the end of 2018, and roughly three fourths of those customers are on postpaid wireless plans. That figure likely makes Shentel the nation's sixth-largest wireless network operator behind U.S. Cellular, which counts around 5 million wireless customers. Privately held C Spire does not release customer numbers but executives have said the operator's customer base sits just below the 1 million mark.

Shentel does not sell wireless service under its own brand; instead, the company has long operated as an affiliate of Sprint. Thus, Shentel sells Sprint-branded wireless services in around 30 retail stores in its wireless network footprint that covers a four-state area from Harrisburg, York and Altoona, Pennsylvania, to Harrisonburg, Va. (Shentel also operates cable and wireline businesses.)

Shentel's wireless network covers around 1,800 cell sites, including the 208 cell towers that Shentel owns (and leases to other providers). The company said it added a combination of 2.5GHz, 1900MHz and 800MHz LTE to roughly 600 sites in 2018 and plans to double that this year.


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So will Shentel increase its spending on its wireless network in order to support the buildout of carrier aggregation, Massive MIMO and its 5G tests? Based on the company's projections the answer is a decided no: Shentel said it spent $86 million on wireless capital expenses in 2018 and expects that number to fall to just $64 million in 2019. Shentel attributed the notable decrease to its equipment purchases for new cell sites last year as well as the completion of integration projects last year related to its purchase of nTelos in 2016.

The decline in Shentel's capex is also noteworthy considering U.S. Cellular is raising its network spending this year. Specifically, U.S. Cellular spent roughly $515 million on its capital expenditures in 2018, a figure that the operator said will rise to between $625 million and $725 million in 2019.

As Shentel moves into 5G this year, the company continues to face a major overhang: The proposed merger of Sprint and T-Mobile. As a Sprint affiliate, Shentel would be seriously affected by that transaction if federal regulators move to approve the deal.

"We're optimistic that our long-standing affiliate agreement with Sprint positions Shentel well for whatever outcomes reached. Competitively speaking, we continue to believe the merger would establish a stronger competitor in the telecom industry as an alternative to the dominant AT&T and Verizon," said Shentel CEO Chris French, according to a Seeking Alpha transcript of his remarks on the company's earnings call. "We've maintained a strong and mutually beneficial relationship with Sprint for more than two decades, delivering the latest in wireless technology to predominantly rural markets. We welcome the opportunity to continue providing value to the new combined company. While we wait for more clarity, we remain focused on continuing to grow our wireless business while providing excellent coverage and service to our Sprint customers."

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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