Sprint CEO Dan Hesse told investors yesterday that the carrier’s decision to “rip and replace” its entire network had led to “dust issues” which have elevated churn in some markets. “As we are building out Network Vision … it is something that really hasn’t been attempted on this scale before, it’s a complete rip and replace of the entire network,” Hesse said on a UBS Global Media and Communications Conference Call. “As a result of that of course, there are what we call dust issues in a lot of our markets. So we have seen elevated churn as a result,” he said.
Hesse said that Sprint’s Network Vision has been a rebuild as opposed to an overlay. “It’s a complete 3G rip-out and new 4G network,” he said. “All the 3G equipment coming out, every base station, all the backhaul, every switch, and in almost all cases the vendors changed as well,” he said. The primary vendors for Sprint’s Network Vision LTE build are Alcatel-Lucent, Ericsson and Samsung. More recently Sprint announced its Sprint Spark LTE initiative, with vendors Alcatel-Lucent, NSN and Samsung.
“In essence, what we are going through now with this massive build is some short-term pain for some long-term gain,” said Hesse. “Personally it’s something that’s painful to me because we have worked so hard on the customer experience and customer service.”
Hesse said that the shutdown of Sprint’s iDEN network this summer cost the company less than it could have, but that the impact was still significant. “Even though we were successful in recapturing 40% of those customers, which was about three times higher than we’d expect given our overall market share, we still lost 60% of those business accounts,” said Hesse.
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