Sprint's Claure: Spectrum is key to our small cell strategy

Marcelo Claure
Sprint CEO Marcelo Claure

Sprint can leverage its spectrum and small cells to densify its network and add capacity more cheaply than its competitors, CEO Marcelo Claure said.

Sprint's network strategy has been the subject of much speculation since Recode reported in January that the carrier was moving forward with plans of a "radical overhaul of its cellular network." The company planned to save as much as $1 billion, according to the report, by leveraging small cells and relocating its towers from space leased by Crown Castle and American Tower to government-owned land where rent is cheaper.

Meanwhile, the nation’s fourth-largest carrier has invested less in its network as it moves to small cells. Sprint raised eyebrows earlier this year when it lowered its capex guidance for the rest of the year to roughly $3 billion, far below analysts' estimates in the range of $4.5 billion. And it spent only $376 million in capex during the second quarter of 2016, which marked a dramatic decrease from the $1.6 billion it spent during the second quarter of 2015.

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Analysts have suggested the decreased spending has more to do with Sprint’s difficult financial position than with any innovative network strategy. But Claure said this week that while Sprint will increase spending on its network, the carrier will also continue to focus on new technologies and strategies that lessen the need for such investments.

"We've proven that you don't need to spend crazy amounts of billions of dollars to build an amazing network," Claure said. “As we densify our network, yes we're going to increase our capex, and yes we're going to increase our opex. But never to the tune of the way it's been done in the past. There are way too many new technologies today. We have way too much spectrum and we’ve been real smart on how we deploy our network.”

Claure declined to say how many small cells Sprint has deployed, but he said the company is overcoming some of the permitting problems that have delayed its installations in some markets. Sprint will disclose the number of small cells it operates "when the time is right," he said.

And Sprint’s airwaves will be crucial as the small-cell deployment ramps up, Claure said. The carrier continues to tout the benefits of its 2.5 GHz spectrum, which the company said is particularly well suited for increasing capacity in the densely populated areas in which small cells are most effective.

“If you look at the foundation of 5G, it's pretty clear that it's also having a very dense network and suddenly this strategy that we started discussing a year, a year and half ago that everybody made fun of and now everybody is chasing, installing small cells on utility poles -- it's faster and it's cheaper,” Claure said. “And why can Sprint do it better than anybody else? We have a lot of spectrum and we have choices whenever we want to put a small cell whether we use wireless backhauling, which you don’t need to connect to fiber, or whether you use fiber."

“Again it's not that we're smarter than the rest,” he continued, “but we have more spectrum than anybody else and if you put spectrum to work, you're going to deliver an amazing experience.”

For more:
- see this Seeking Alpha transcript

Related articles:
Sprint’s shrinking spending drags U.S. wireless capex down 10% in Q2
BTIG sees 'red flags' in Sprint's network strategy
Sprint faces questions on Mobilitie's small cell rollout efforts, handset write-off costs

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