Sprint shed more light on its "Next-Generation Network" Tuesday, promising it would significantly densify its network across all of its various spectrum bands via thousands of new macro sites, tens of thousands of new small cells and further 2.5GHz expansion. And it doesn't plan to spend more to make it happen.
Speaking on the carrier's fiscal first-quarter earnings call, Sprint Corp. (NYSE: S) CEO Marcelo Claure said the carrier would be "extremely surgical and efficient by leveraging big data and network diagnostics" and other "new tools" to determine where it should deploy small cells on street level to improve the network. Sprint will embrace its existing vendors and new, innovative companies for the network upgrade, he said.
Sprint also recently began using 2x20MHz carrier aggregation to improve capacity and speeds in its 2.5GHz spectrum on select sites across the country. It also called out its use of antenna beamforming to improve performance at the cell edge. (See Sprint Plans to Meld TDD, FDD LTE Spectrum.)
Claure was joined by SoftBank Corp. Chairman and CEO Masayoshi Son on the earnings call as a show of support for Claure and the new team he has put in place, including yesterday's announcement of a new CTO, CFO and COO. (See Sprint Swaps in a New CFO, COO & CTO.)
Son had some harsh words for all the wireless operators in the US, calling their networks "very, very bad" and inferior to what he's built in Japan. SoftBank is superior in coverage and speed, he said, and was built with half the capex spend. Networks in the US aren't ready for new video services, like Verizon Wireless 's over-the-top service, because they can't yet support the extra traffic, he jibed. (See Verizon Dubs New OTT Service Go90 – Report.)
"It's easy to spend money and get a result, but if you have less money and then still want to achieve the number one network, you have to use brains instead of money and muscle," Son said. "We have used brains a lot and created a lot of unique solutions that other companies do not have."
Now, he said, SoftBank is prepared to replicate what it has done in Japan with Sprint in the US given their similar spectrum holdings. "In my view, it'll be a lot better network very soon with much lower capex," Son said of Sprint. (See Sprint Spend Slowing Ahead of Next Network Push – Analysts.)
Son admitted he lost confidence with Sprint when its attempt to acquire T-Mobile US Inc. failed, but he has renewed faith in the company and has been "very, very involved" on the network side, working with his engineers every night from 10 p.m. to 2 a.m. to design Sprint's Next-Generation Network and find opportunities to improve opex.
"As a result, Marcelo and I and the total team of Sprint and SoftBank together, now we have a plan to have a big turnaround," Son said. (See Sprint CEO Claims Next-Gen Network Will Be #1.)
Sprint ended the quarter with $6.6 billion in cash and an additional $1.3 billion available under its previously obtained vendor financing agreements, cash it intends to use to purchase 2.5GHz equipment. It also announced Tuesday that SoftBank and an undisclosed partner have set up a leasing company to finance both the devices and the network equipment Sprint leases. SoftBank will be a minority equity investor in the company. (See Sprint Signs $1.8B in Vendor Financing Deals .)
Claure says that with the leasing company, further expense reductions and a "capital efficient deployment of the network," Sprint won't need to raise additional capital through public debt, the equity markets or a spectrum sale for the foreseeable future. (See Sprint Mulling 2.5GHz Monetization Opps.)
For the first quarter, Sprint added 675,000 customers and reported improved postpaid churn of 1.56%, but it wasn't enough to stave off T-Mobile's advances. With 1.2 million customer additions, the "uncarrier" surpassed Sprint in the quarter in total subscribers, ending the quarter with 58.9 million subscribers compared to Sprint's 57 million. (See T-Mobile Beats Sprint on Subs, Eyes Verizon on Network.)
Sprint reported a loss of $20 million, or 1 cent a share, on net operating revenues of $8 billion in the first quarter. That's down 9% from the previous year, but beat analyst expectations. The carrier's stock was up .20 points, or 5.84%, to $3.54 on the better-than-expected quarter and perhaps buoyed by Son's bravado. (See Sprint Posts Q1 Revenue of $8B.)
— Sarah Thomas, , Editorial Operations Director, Light Reading