In infrastructure news this week, Sprint’s spending is in the spotlight, Verizon’s towers may be for sale, Alcatel-Lucent has a major new contract, and Rackspace is going it alone.
Infrastructure News
Sprint spending outlook
Sprint will focus the deployment of its 2.5 GHz spectrum assets in urban areas, and that could mean some shifts in its spending plans. In addition, speculation that Sprint will sell and lease back its long-distance network has resurfaced, with Oppenheimer’s Tim Horan naming Level 3 as the most likely buyer.
Softbank CEO Masayoshi Son is of course the decision maker for Sprint now, along with new CEO Marcelo Claure. Analyst Jennifer Fritzsche of Wells Fargo does not expect a Sprint spending slowdown; she says Son is a “cell site guy,” and notes that Tokyo alone has about 30% as many cell sites as the entire United States. When Softbank was looking at an acquisition of T-Mobile US, Son told the Chamber of Commerce that the United States needs more cell sites, and Claure has said that he sees “major opportunities to add more cell sites.”
Crown Castle seen as potential buyer for Verizon Wireless towers
Crown Castle CFO Jay Brown told investors this week that his company would be interested in Verizon’s towers if they become available. Verizon has expressed interest in a possible sale, saying that AT&T’s $4.8 billion sale of its towers to Crown Castle “opened its eyes” to the potential value of its towers.
Verizon has an estimated 12,000 – 15,000 towers, and CFO Fran Shammo has said that the carrier would want to retain the option to expand its network, suggesting that Verizon would look at selling lease rights (as AT&T did) instead of selling its towers outright.
Alcatel-Lucent wins Globe Telecom contract
President François Hollande of France and President Benigno Simeon Aquino III of the Philippines witnessed the signing of Globe Telecom’s contract with Alcatel-Lucent, which will upgrade the carrier’s Wi-MAX infrastructure to LTE-TDD and LTE-FDD on the islands of Visayas and Mindanao in The Philippines.
The Philippines is the world’s 12th most populous nation, with 100 – 105 million residents and at least one mobile device per person. Globe Telecom has 45 million customers. Alcatel-Lucent will deploy LTE radio access network equipment at roughly 1,200 sites, and will also deploy a converged network management system. The company will also manage the projects, including installation, engineering and integration.
Rackspace will go it alone
Rackspace spent the summer evaluating potential takeover bids and decided that none of them offered as much value as the company can create on its own. Investors are unconvinced; they dumped Rackspace shares on news that the company will remain independent.
Rackspace offers Web hosting and “managed” cloud services. It wants to differentiate itself from cloud service giants like Amazon and Google by helping its clients manage the applications that they deliver from the cloud.
OpenStack, an open-source operating system for cloud computing, was developed by Rackspace. Wireless infrastructure manufacturers have shown significant interest in OpenStack. Hewlett-Packard recently announced plans to invest a billion dollars in OpenStack-related software initiatives. Until this week, HP was seen as a possible buyer of Rackspace.
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