Sprint reported its first-quarter fiscal year 2020 results Friday, lauding the number of people covered by its 5G networks, but again reiterating that it needs the completion of its $26.5 billion merger with T-Mobile to fully compete with AT&T and Verizon. Separately, Texas joined the state attorneys general in a lawsuit that's aimed at blocking the merger.
Sprint is continuing its mid-band 2.5GHz buildout of 5G, with markets in Chicago, Atlanta, Kansas City, Dallas-Fort Worth and Houston already live. More cities will follow soon, says CEO Michael Combes in an update on Sprint’s earnings.
"With New York City, Los Angeles, Phoenix and Washington, D.C. launching in the coming weeks, this will give Sprint the largest initial 5G coverage footprint in the U.S. We expect the coverage area of our initial 5G deployment to reach approximately 2,100 square miles across parts of nine metro areas, covering 11 million people," Combes says.
Nonetheless, Sprint will not be able to compete on 5G, unless it completes its merger with T-Mobile, Combes says.
"As a stand-alone company, we lack the scale to keep pace with the bigger carriers, AT&T and Verizon, in sustained capital investments," the CEO says. "Without additional low-band spectrum, we will face challenges to provide customers with consistency or coverage comparable to that of the two big carriers. Nevertheless, we expect to complete our merger with T-Mobile, which will allow the combined company to have the breadth and depth of spectrum to provide a consistent nationwide 5G experience."
A merged Sprint/T-Mobile would combine Sprint’s 2.5GHz spectrum with T-Mobile’s 600MHz low-band spectrum. T-Mobile’s 600MHz 5G nationwide 5G network is expected to launch in 2020.
Network capital expenditures at Sprint for the quarter increased, as CFO Andrew Davies noted. "Network cash capital expenditures of $1.2 billion increased $57 million year-over-year and $40 million sequentially as we continued to execute our Next-Gen Network plan and began launching mobile 5G in select metro areas," the CFO commented.
Sprint reported consolidated net operating revenues of $8.1 billion for the quarter, up $17 million year-over-year. Net loss for the quarter was $111 million for the quarter. Total wireless service revenue for the quarter was $5.4 billion, a 3% decline from a year ago.
Texas resists Sprint/T-Mobile merger Texas joined the attorney generals from 14 states in their bid to stop the $26.5 billion merger fo Sprint and T-Mobile. The nation's largest carrier, AT&T, has its worldwide headquarters in Dallas.
Magistrate Judge Robert Lehrburger, who is working with Judge Victor Marrero in the case, ordered a delay until December 7 on Thursday. The case was due to start October 7, 2019, and is expected to last two to three weeks.
The states asked for more time to consider a $5 billion deal struck by the Justice Department last week designed to make satellite TV company Dish into the fourth national wireless carrier in the US.
Under the deal that the DoJ helped orchestrate, Sprint and T-Mobile would divest Sprint’s Boost Mobile prepaid division to Dish Network, and provide Dish with access to 20,000 cell sites and hundreds of retail locations.
The companies are not pleased by this delay. "Every day we can’t integrate puts us a day behind the competitive race," David Gelfand, a lawyer for T-Mobile, told the court, Reuters reported.
- Dish/T-Mobile/Sprint: Winners, Losers & What's Next
- T-Mobile/Sprint Merger Gets DoJ Approval Thanks to Dish's $5B Deal
- T-Mobile's jobs pledge smells fishy
— Dan Jones, Mobile Editor, Light Reading