Sprint’s continued operational struggles could require the carrier to seek out another $3 billion in funding over the next three years, according to a recent report from Evercore ISI telecom analyst Jonathan Schildkraut.
Tech Trader Daily noted in a story that Schildkraut’s forecast does not include any additional funding that might be needed by Sprint to participate in the 600 MHz incentive auction currently scheduled for 2016. The Federal Communications Commission’s current Auction 97 was approaching $42 billion in total bids on spectrum licenses not seen as nearly appealing as the 600 MHz band set to be auctioned in early 2016. Sprint is currently sitting out the Auction 97 proceedings, but has said it planned to participate in the incentive auction.
Sprint owner Softbank recently noted that it would be willing to fund Sprint’s financial need, with Softbank Managing Executive Director Yoshimitsu Goto recently telling an investor conference that the Japan-based company could provide more capital support. Sprint is looking to remove that need by announcing plans to curtail capital expenditures in 2015, a move the carrier said would be possible by tapping into the network deployment expertise and scale provided by Softbank.
“It’s really a result of better deployment, more efficient deployment, being on time and getting better rates,” explained Sprint CFO Joe Euteneuer at the same conference, following questions on how the carrier can bolster its network while at the same time cutting costs.
Schildkraut expressed doubt over Softbank’s funding plans.
“We believe this financing will come as debt given (Sprint’s) low stock price and the likelihood that Softbank would not want to dilute its holdings,” Schildkraut said.
Softbank has already been hit financially by Sprint’s ailing operations, posting a steep drop in operating profits partially tied to its ownership of Sprint.
Sprint also has announced plans to cut jobs in an attempt to better align its current workforce with operational performance. Those moves are expected to boost the bottom line, but risk damaging employee morale at a time when the carrier is looking to provide a new face to consumers.
–While winners of Auction 97 won’t be known until the activity concludes, at least one analyst thinks Verizon Wireless could be behind the auction’s record-breaking haul.
BTIG Research analyst Walter Piecyk recently noted in a report that Verizon Wireless’ current move to begin refarming spectrum in the 1.9 GHz band could indicate that the carrier is “chewing through spectrum at a faster rate than expected,” and could be throwing money at spectrum licenses up for bid in order to continue feeding its data-hungry customer base.
“We did not expect Verizon to have to tap into their PCS spectrum until later in 2015 based on past deployment timelines and the confident statements of the management team about their existing spectrum position,” Piecyk wrote.
Verizon Wireless’ LTE network is currently using 20 megahertz of spectrum in the 700 MHz band, as well as between 20 megahertz and 40 megahertz of spectrum in the 1.7/2.1 GHz band as part of its XLTE initiative. Verizon Wireless has up to 40 megahertz of spectrum in the 1.9 GHz band in most markets, as well as 25 megahertz of spectrum in the 850 MHz band that is the basis for its legacy voice services.
Piecyk also noted that with Verizon Wireless’ current nationwide network of approximately 48,000 cell sites compared to around 65,000 cell sites used by AT&T Mobility, Verizon Wireless may need to dip into a greater bucket of spectrum in order to cater to capacity issues. Verizon Wireless recently announced a deal with SpiderCloud to serve up small cells to the enterprise market.
–Mobile virtual network operator FreedomPop is set to rollout new holiday promotions that nearly match what the company offered up last week as part of its “cyber week” deals.
FreedomPop said it would offer its Liberty “phablet” priced at $50, ZTE Force smartphone priced at $99 and an LTE hot spot device for $49. The Liberty comes with 200 calling minutes and 500 text messages for free; the Force adds 500 megabytes of cellular data; and the hot spot offers up just the free data.
Additional carrier news can be found on the RCR Wireless News “Carriers” page.
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