Nationwide Sprint small cell roll out permitting and approval process is ‘ahead of expectations’
Amid a stock rally prompted by a recommitment signal from parent company SoftBank, a team of Wells Fargo Securities analysts described a June 24 meeting with Sprint execs as “extremely bullish.”
In a research note, Managing Director of the Equity Research Department Jennifer Fritzsche wrote that meetings with CEO Marcelo Claure, CFO Tarek Robbiata, CTO John Saw COO of Technology Gunther Ottendorfer highlighted “many good things happening at Sprint right now operationally, with its capital structure and with its network improvement.”
She said the “biggest challenge” facing the No. 4 U.S. carrier “is improving the brand image and adjusting its distribution to help with this brand building effort. That said, it is difficult for us to identify any near term negative headline to derail the shares beyond macro noise. What Sprint can control it is controlling quite well.”
Claure, according to the research note, said postpay customer churn is improving and putting Sprint “in fighting distance from T-Mbie and Verizon in some markets.”
On the network side, Sprint is in the process of a massive nationwide small cell rollout. According to Fritzsche, “Both Claure and the network team indicated that, while in some markets it has to be more ‘patient’ overall, the permitting and approval stage for its small cell deployment has been ahead of expectations. The most interesting take-away was the fact that today Sprint carries more ‘tonnage per subscriber’ of data than any other carrier in the U.S. – yet it is using only less than 25% of its 2.5 GHz spectrum holdings.
The Overland Park, Kan.-based carrier has an enviable spectrum portfolio including its 2.5 GHz holdings, which Fritzsche said the carrier is using less than one-quarter of the total with “no meaningful congestion.”
She concluded that sales conversion “has moved in the right direction” but retail reach needs to expand. “Robbiati spoke of 1,000 new (not incremental) stores to be added. Sprint is continuing to challenge the model of traditional distribution and is beefing up its internal digital capabilities and other methods…”
