Sprint: Altice deal lets us cut through red tape of small-cell deployments

Sprint CFO Tarek Robbiati (Sprint)

Sprint’s MVNO deal with Altice will enable it to cut through some of the red tape that continues to plague small-cell deployments, Sprint CFO Tarek Robbiati said Thursday.

The nation’s fourth-largest wireless operator inked a deal last month to serve as the network operator for an upcoming MVNO offering from Altice, the fourth-largest cable provider in the United States. The pact—which Sprint positioned as a “first of its kind agreement”—enables Altice to provide wireless services through Sprint’s wireless network, while Sprint will use Altice’s broadband infrastructure to densify its wireless network.

Last month’s announcement came on the heels of failed negotiations to merge with T-Mobile, and it clearly disappointed investors as Sprint shares sank more than 12% on the news. But Robbiati said Thursday that the deal paves the way for Sprint to roll out small cells more quickly than it could otherwise.

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“We had a very positive negotiation (with Altice) because we looked at a very different model, a model where both companies leverage their own assets to deliver what’s important for the other company,” Robbiati said Thursday during an investor conference, according to a transcript from Seeking Alpha. “And so in negotiating with Altice, what was important for us is to gain access to their backhaul for macro tower backhaul needs. They gave us access to their backhaul and what we believe is commercially attractive for us.

“Equally it was also important to us (to have) the ability to deploy our own hardware cell-site hardware in the infrastructure over air strands,” he continued. “So we’ll build small-cell sites in their footprint that will hang over aerial cable; that aerial cable provides power in the backhaul that was very important for us to be able to do that. It doesn’t involve permitting. So there is a time-to-market element that is really valuable to us.”

That strategy could pay dividends for Sprint because zoning and permitting headaches continue to shackle the market for small cells. Some municipalities are fighting small-cell deployments based on concerns over aesthetics, noise, rights-of-way and other issues, and cities and towns around the nation continue to scramble to establish their own rules for small-cell deployments.

Meanwhile, federal intervention looms on the horizon as the number of skirmishes between local municipalities and states increases. The FCC voted in May to move forward with plans to make it easier for wireless carriers and their partners to deploy small cells in municipalities across the country. The agency approved “an examination of the regulatory impediments” at state and local levels that can slow the rollout of small cells and other transmitters in an effort to streamline siting and deployment processes.

Robbiati said earlier this week that Sprint plans to deploy “a few thousand towers” over the next two years as it ups its capex to continue to narrow the network gap with its bigger rivals, but small cells clearly remain a priority as the carrier continues to densify its network and leverage its stockpile of 2.5 GHz spectrum. Altice obviously doesn’t have the network footprint some of its competitors have in the United States, but the deal should allow Sprint to roll out small cells in the markets where Altice has a presence significantly more quickly than it could have in the past.