Sprint (NYSE: S) revealed a few more details about its network densification efforts but did not disclose its vendor partners for the project or exactly how many macro cell sites and small cells it will add to its network. However, Sprint CEO Marcelo Claure said that "nearly all" of Sprint's existing macro cell sites will be upgraded to support 800 MHz, 1900 MHz and 2.5 GHz for LTE, which he said will improve coverage and capacity across the network.
During Sprint's quarterly earnings conference call, Claure, along with Sprint Chairman and SoftBank CEO Masayoshi Son, provided more details on the densification project, which Sprint has dubbed the "Next Generation Network."
Claure said that Sprint will add "thousands" of new macro sites and make sure that it expands tri-band LTE to nearly its entire footprint (Sprint's LTE network, with its 5x5 MHz block of 1900 MHz spectrum, covers around 280 million POPs). Sprint will also added "tens of thousands" of small cells to its network. Analysts have speculated Sprint may add up to 70,000 small cells to its network.
However, Claure said that Sprint will be "surgical and efficient" in how it deploys new sites, and will use Big Data and other analytical tools to ensure it is deploying them in the most effective places. Importantly, he said that the densification will be a "progressive build" and will only improve the customer experience over time, and will not disrupt existing cell sites. That stands in stark contrast to Sprint's initial "Network Vision" network modernization project, in which Sprint had to "rip and replace" its entire 3G CDMA network as part of the upgrades it made for voice coverage and the deployment of LTE. That increased service disruptions and churn significantly in 2013 and 2014.
Claure said Sprint will use both existing vendors and new vendors for the densification as well as "various options" for backhaul, though he did not go into any details. Analysts have also speculated that Sprint will likely use in-band wireless backhaul solutions using the lower 2.5 GHz spectrum band that would not require line of sight.
Claure said Sprint will fully embrace the knowledge and expertise of its parent company, SoftBank, which, like Sprint, has deployed a 2.5 GHz TD-LTE network in Japan. The companies are also working to set up a leasing company to help Sprint finance the purchase of network equipment.
"We are preparing network equipment lease facilities," Son said. "Again, capex is a long-term investment. So we are going to provide a solution together with our equity partner for the network equipment and also the small cell foundation."
Sprint also still has an additional $1.3 billion of availability under vendor financing agreements that can be utilized toward the purchase of 2.5 GHz network equipment.
Claure said that given Sprint's spectrum depth -- it has around 120 MHz of 2.5 GHz spectrum on average in 90 of the top 100 U.S. markets -- it will "best positioned" of all of the carriers to take advantage of the data demands carriers will face in the years ahead.
Sprint expects to spend $5 billion on capital expenditures in its fiscal 2015 year and then maintain that level of capex spending for two years after that, for a total of $15 billion over three years.
Claure said in May that he thinks Sprint will have the No.1 network in the U.S, in the next 18-24 months. On the call, he said "our network is going to be able to have parity or superiority over the next two years." He said Sprint's initial densification efforts have shown that it can significantly improve coverage, speeds and capacity and that "if we densify our network and leverage our spectrum, we have the capacity to be No. 1."
Son said that every night, from 10 p.m. to 2 a.m. in Japan he has been working with his engineers on Sprint's network plans. While the U.S. environment is different from Japan, most of the fundamentals of how to deploy the network "are exactly identical."
In terms of what's been happening in Sprint's network to date, the company has continued to expand its 800 MHz and 2.5 GHz LTE overlay and has seen "immediate improvements in consistency and reliability" and a 133 percent increase in average download speeds year-over-year.
Sprint has also started the deployment of two-carrier carrier aggregation in the 2.5 GHz band in 80 markets, including parts of Atlanta, Chicago, Detroit, Houston and San Francisco. Claure said Sprint will be adding more markets over time. Carrier aggregation, which is the most well-known and widely used technique of the LTE Advanced standard, bonds together noncontiguous bands of spectrum to create wider channels and produce faster speeds. Sprint executives have long said carrier aggregation is what will help set Sprint apart from its competitors.
Claure said that, with carrier aggregation, Sprint expects capacity and speeds to double, and that, in markets like San Francisco, customers are seeing peak speeds of 125 Mbps to 135 Mbps. He also added that Sprint is one of the first carriers to roll out carrier aggregation with antenna beamforming, which he said "significantly improves users' experiences at the cell edge." Sprint currently has seven devices in its portfolio capable of accessing two-carrier carrier aggregation in the 2.5 GHz band and will expand that portfolio of devices over time.
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