Mobilitie downplayed reports that its efforts to deploy tens of thousands of small cells for Sprint (NYSE: S) have stalled in part due to troubles dealing with local authorities.
The Newport Beach, California-based company is reportedly Sprint's primary vendor as the carrier looks to roll out as many as 70,000 small cells in cities across the country to densify its network and leverage its 2.5 GHz spectrum. Mobilitie made news two weeks ago when The Wall Street Journal reported that the deployment has been delayed as Sprint awaits zoning approval for the cells, which is one reason the operator recently lowered its capex guidance for the rest of the year to $3 billion, far below the expected $4.5 billion.
Indeed, Mobilitie has come under fire for being at least partly responsible for a U.S. small cell market that has slowed due to local regulatory concerns. Small cell deployments have been rumored to be on hold in roughly a half-dozen U.S. markets while vendors, carriers and local authorities struggle to develop policies and practices for deploying and maintaining the briefcase-size antennas on utility poles and other local rights-of-way.
But Mobilitie CEO Gary Jabara told attendees at an investors conference Tuesday that it is clearing bureaucratic hurdles faster than recent reports would indicate, according to Wells Fargo Securities analysts.
"Finally, from Mobilitie, we heard a very contrarian and constructive view on Sprint's network initiatives," Jennifer Fritzsche of Wells Fargo wrote in a research note. "Mobilitie did indicate despite all the noise out there, it is getting through the zoning and permitting stage much faster than the market appreciates and there have been no municipalities that have pushed a full-on moratorium on small cell deployment as some have speculated."
Jabara also refuted claims that Sprint's decreased capex guidance is an indication that the carrier is slashing its network investment for the rest of the year. Analysts have expressed concerns that any such move could prove devastating, resulting in future network troubles for the struggling operator.
"While we understand that Mobilitie is a vendor of Sprint, Mobilitie presented a picture in which Sprint IS spending, moving fast in its small cell deployment and thinking of the network in a new and unique way," Fritzsche wrote.
Fritzsche did note, however, that Sprint appears to have entirely shifted its focus away from macrocells, at least for now. "Starting with the towers," she wrote, "we heard similar messaging to what we heard at the PCIA conference in Dallas last month… VZ and T-Mobile – busy, AT&T and Sprint – NaDa!"
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