Report: Sprint considering cutting one-third of its base stations

Sprint Nextel (NYSE:S) is considering decommissioning 20,000 base stations--or one-third of its current base station total--over the next several years, according to BTIG analyst Walter Piecyk.

In a blog post, Piecyk said the carrier had referenced a plan recently to decommission the base stations within two years, but has since reiterated doing so over a longer time frame. According to BTIG's analysis, Sprint is considering deploying a new multi-mode radio for its base stations, which could allow for the reduction in cell sites (and associated operating costs). BTIG estimates the cell-site reduction could cost as much as $2.5 billion.

"Finally, our initiation referenced the use of the iDEN technology in the multi-mode radios but we now believe that iDEN will not be a part of that multi-mode radio which brings up more questions on how exactly Sprint will achieve its cell site reduction plan," Piecyk wrote in the post. "Apparently, Sprint and its vendors have found a way to make its spectrum travel further. This is of particular to interest to us, as our belief is that coverage expansion can be achieved by deploying new more expensive antennas and/or powering up the cell site. We had not factored that expense into our $2.5 billion estimate in the initiation. Reduced cell sites also should be examined in light of the impact to network capacity."

Sprint is in the early stages of a multi-mode network technology RFP, Sprint CEO Dan Hesse said earlier this summer, an effort that might include LTE--but he said no decisions have been made. A Sprint spokeswoman, Kelly Schlageter, told FierceWireless that the company does anticipate bringing down the number of cell sites its operates "as part of the reduced deployment costs via our existing RFP." She declined to comment on BTIG's specific claims.

"The RFP is for an evolution of the Sprint network and as we have stated publicly, we expect the plan to increase coverage, reduce operating costs, strengthen our competitive position, create spectrum flexibility, lower future deployment costs and improve environmental sustainability," Schlageter said. "We will provide more details on the overall plan when vendor selection is complete and details are available."

In July, the Financial Times reported that, according to unnamed sources familiar with the matter, Huawei was looking to sell equipment needed for an expansion of Sprint's mobile broadband network, which might include the multi-mode radio Piecyk referenced. The report did not say what kind of equipment was under discussion--nor did it say if, or when, a decision regarding the contract would be made.

The nation's third-largest carrier, which achieved positive quarterly subscriber growth for the first time in three years in the second quarter, expects to spend around $2 billion on capital expenditures in 2010. Sprint also recently inked a major network outsourcing deal with Ericsson.

Word of Sprint's decision to potentially cut its base station numbers comes as other companies are trumpeting their network expansions and enhancements. AT&T Mobility (NYSE:T) said last week that in the first half of the year it added 600 new cell sites, upgraded 925 cell sites to 3G services and deployed more than 6,500 additional radio carriers and 32 Distributed Antenna Systems.

For more:
- see this BTIG blog post (sub. req.)

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Article updated Sept. 13 with comment from Sprint.