Sprint (NYSE: S) wholesale partner nTelos Wireless has reduced the number of people it plans to cover with its own LTE network thanks to its recently announced network agreement with Sprint, which includes reciprocal LTE roaming.
NTelos first launched LTE in the fourth quarter of 2013 and earlier this month the company announced that its LTE service covered 2.8 million POPs, including the major markets of Richmond and Norfolk, Va. On May 7 the company promised to cover 4.2 million POPs with LTE by the end of 2014.
However, when discussing the carrier's second-quarter results Monday, nTelos CFO Steb Chandor said the carrier intends to "have approximately 55 percent of our existing 6 million cover POP footprint served with LTE" by the end of 2014. That works out to roughly 3.3 million POPs.
When asked about the discrepancy, Jeffrey Goldberger, an investor relations counsel to nTelos, told FierceWireless that the difference in LTE coverage targets for the end of 2014 relates to the new Sprint network agreement that nTelos announced May 22. "The company continues to revise its build based on the terms" of the agreement, he said.
Under the revised terms Sprint and nTelos agreed to in May, nTelos will continue to be the exclusive network provider for Sprint services in its western Virginia and West Virginia service area, which covers around 2.1 million POPs. Sprint customers will have access to nTelos' recently launched LTE network and nTelos will have access to Sprint's 800 MHz, 1900 MHz and 2.5 GHz spectrum throughout the territory. Additionally, nTelos retail customers will also have access to Sprint's nationwide LTE network outside the nTelos network footprint.
As part of the deal, nTelos also said it plans to expand and build its LTE network in the western Virginia and West Virginia territory to specifications that are aligned with Sprint's Network Vision network modernization program. Further, nTelos also agreed to make "future feature upgrades," presumably for LTE Advanced services and beyond. As part of that upgrade, nTelos agreed to substantially complete the network enhancements no later than May 2017, though Chandor said "we are continuing to work to accelerate the buildout into the coming two plus years."
Thus, nTelos' LTE coverage target is now smaller because the carrier will be roaming onto Sprint's LTE footprint. The agreement between nTelos and Sprint runs through 2022.
"With our renewed Sprint agreement we have modified our build plans in the SNA territory to better leverage our capital," Chandor said, referring to the Sprint Network Alliance, the formal name of the network agreement between the two carriers. "Our upgraded network will support Sprint's tri-band solution where we constructed as overlay to the majority of our existing networks as opposed to a full rip and replace. This strategy should allow us to avoid decommission existing assets and minimize the potential service impact on subscribers in the SNA territory."
In other nTelos news, the company during its earnings call gave more details on its forthcoming equipment installment plan. Chandor said that "not having an EIP in place put it at a competitive disadvantage for the first half of the year." The company expects to launch what it calls "nPower 2.0" sometime in August, which Chandor said the company believes "will have a positive impact on our postpaid business." The carrier also plans to make changes to its rate plans but did not go into details. Chandor said the nTelos EIP program "will be structured similar to what our competition currently offers, allowing customers to purchase devices with no money down and pay for the devices over time" with the option to upgrade a device after 12 months of payment.
Chandor also said nTelos continues to "make good progress on our pilot program" with Dish Network (NASDAQ: DISH). The carriers are partnering on a fixed TD-LTE service using 2.5 GHz spectrum. On July 16, the companies started to offer high-speed wireless Internet service to select customers in Charlottesville, Waynesboro, Staunton, Harrisonburg and Roanoke, Va. The service provides speeds of more than 10 Mbps, Chandor said, and costs $29.99 per month when bundled with a qualified Dish satellite TV service plan. "So far feedback has been positive, but it's important to understand that this Phase 2 trial is in its very early stages," he said.
The second quarter was a relatively quiet one for nTelos, which added just 400 total net subscribers in the period, including 3,300 postpaid adds and 2,900 postpaid net losses. The carrier ended the quarter with 458,100 total wireless customers, including 308,200 postpaid subscribers and 149,900 prepaid customers. The carrier notched operating revenues of $117.8 million in the second quarter, down slightly from the $119.9 million it reported in the year-ago period.
Concurrent with its second quarter earnings, nTelos reported that CEO James Hyde submitted his resignation and quit the company. NTelos management declined to give any details around Hyde's departure. Hyde joined nTelos in March 2009 as president and COO and was named CEO in December 2009. He led the spinoff of Lumos Networks in 2011, launched the iPhone in 2012 and brought nTelos closer to Sprint. The carrier said Rodney Dir, a board member, will serve as president and COO and that Chairman Michael Huber will oversee strategic relationships and external communications. The company said it plans a "thorough search" for a new CEO.
Hyde is also no longer a member of the board of directors of the Competitive Carriers Association, where he had served as vice chairman. "I thank Jim Hyde for his service to CCA's Board and his leadership as vice chairman over the past year," CCA President Steve Berry said in a statement to FierceWireless. "NTelos continues to be an active member of CCA, and we look forward to our continued work with nTelos and all CCA members to ensure competitive carriers can continue to compete and thrive in the wireless industry."
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