This week’s Carrier Wrap looks at Sprint network plans and financial results
Following a rough week on Wall Street, Sprint this week provided a bit of clarity on its network plans as part of the release of its third fiscal quarter results. Those details were the main topic of discussion for show host Dan Meyer and RCR Wireless News managing editor Sean Kinney on this week’s Carrier Wrap.
In terms of its network plans, Sprint shot down a recent news report claiming the carrier had “finalized” plans to re-architect its network away from its current reliance on traditional cell tower companies and backhaul suppliers and instead focus on tapping “government-owned properties” and microwave backhaul solutions. The report claimed Sprint was expected to move on the network plan, known as the Next Generation Network initiative, by mid-year.
Sprint stock lost almost one-third of its value last week following the report, dropping to a new 52-week low of $2.18 per share. The stock has since rebounded, surging more than 18% on Tuesday trading to close at $2.99 per share.
Sprint management explained its network plans would see the carrier re-evaluate all of its tower sites, but that it would not make moves that would hinder service quality. The carrier also said it was not looking to ditch its current tower contracts, with a focus on working further with rural carriers in expanding the reach of its LTE footprint.
“What we are doing is densifying the network and there are not enough towers to do that,” Claure said, adding the carrier would rely heavily on “mini-macro” sites as well as erect more macro sites.
Sprint this week also posted financial results, showing it added 491,000 net connections during the final three months of last year, which was about half the growth posted during the same period in 2014 and the previous quarter. However, the latest growth was led by 501,000 net additions from more financially lucrative postpaid connections, which was significantly more than the previous reporting periods, and more importantly included 366,000 postpaid “phone” connections. Holding back overall connection growth was a loss of 491,000 prepaid customers during the latest quarter compared with a gain of 410,000 prepaid customers in 2014.
Overall revenues across the organization dropped nearly 10% year-over-year to $8.1 billion for its third fiscal quarter, with both service and equipment revenues taking a hit. At the same time, Sprint managed to trim more than $3 billion in operating expenses, which helped slash net losses from $2.4 billion during the final three months of 2014 to a loss of $836 million last year.
The discussion also touched on Verizon Wireless’ fiscal fourth quarter results, which showed slower year-over-year growth, but improvements in both churn and revenues.
Verizon Wireless said it added nearly 1.4 million “retail” customers during the fourth quarter, which was down a significant 34.1% compared to the same quarter in 2014. The latest results included 1.5 million postpaid net additions, which was down 23.5% year-over-year, and a loss of 157,000 prepaid customers compared with a gain of 81,000 prepaid customers in 2014.
Providing further analysis on the news was Roger Entner, founder of Recon Analytics, who dug a bit deeper into Sprint’s current position, noting while the carrier is undoubtedly operating on unstable ground, the carrier is far from the lost cause many are claiming.
Entner also touched on a recent report he conducted for wireless trade organization CTIA, which showed a significant economic bump connected with the release of additional spectrum resources for commercial services. Entner claims that conservatively, the U.S. economy grows by $3.1 billion and over 100,000 new jobs are supported with each 10-megahertz of new spectrum freed up for commercial use. The report also claims more than $1.6 billion in additional economic benefits from mobile apps and content that rely on mobile broadband services.
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