Sprint’s Future Growth Likely to Focus On Small Cells, Not Towers

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While the East Coast continues to shovel out of an historic snow storm, Wall Street and the Tower Industry will be looking for Sprint to shovel out of its own special storm that hit it, and subsequently tower companies, when San Francisco-based tech news publisher Re/code printed a January 15 article that doomed Spring’s future relationship with towers companies. According to Re/code, Sprint, intended to move its “radio equipment” off commercial towers owned chiefly by American Tower Co., Crown Castle and SBA Communications and reaffix to “government-owned towers” as part of a $1 billion cost-cutting measure. Industry eyebrows immediately raised about how logical that scheme was, but the damage was done. (Sprint was never directly quoted in the Re/code article but a Sprint spokesman did tell Inside Towers “we are not commenting” on the article.) Sprint and tower company shares spent the ensuing week auguring into the earth. Sprint quickly moved up the date to release its third fiscal quarter results (7:30 am ET this morning) and its management team hosts a conference call an hour later. It’s an opportunity for the nation’s fourth largest carrier to right its ship.

“We are looking for greater clarity on its small cell network plans and little more granularity on promotional plans, subscriber growth and strategies,” Ethan Lacy with New/ Street Research told Inside Towers yesterday afternoon. “We’d like an update on cost-cutting.”

And so would the folks that own and operate towers that Sprint has contracted with since there has been nothing but utter confusion since the story appeared. New/Street’s telecom team isn’t buying it. Lacy said for Sprint to “rip and replace” all of the upgrades and new equipment it added to its network in 2013 and 2014 doesn’t add up. In fact, “we think it’s the opposite. Sprint spent a considerable amount of time and money and they are not going back and tearing it up,” Lacy told Inside Towers. He said New/Street is convinced that the Re/code “misinterpreted” how the company planned to save in the future by relying more on an expanding small cell and DAS network.

January 26, 2016 |
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