Someone still has faith in Sprint – and it’s not just Masayoshi Son.
Though many analysts panned Sprint’s network strategy after the carrier cuts its capital expenditure forecast to just $3 billion for 2016, FBR & Co.’s David Dixon on Tuesday argued Sprint is in a better position than most think.
According to Dixon as cited by Barron’s, Sprint has the potential to “become the lowest-cost and fastest data network among the national carriers that are migrating to a greater dependency on low-cost WiFi spectrum ahead of a migration to low-cost, shared LTE spectrum in the 3.5 GHz band and beyond.”
Sprint stocks were up 3.26 percent Tuesday afternoon following Dixon’s report.
Dixon said “there is a general lack of understanding” surrounding Sprint’s plan to increase network speeds and coverage at a reduced cost using small cells, but noted the strategy is sound.
Back in March, Sprint CFO Tarek Robbiati laid out an ambitious plan to build out its network and lay the foundation for 5G using thousands of small cells. Last month, Robbiati said the cost of deploying these cells is 60 percent to 70 percent lower than the cost of building a traditional tower site.
“You don’t have to spend a lot of money in a 5G world to create a cracking network, especially if you have a huge amount of spectrum,” Robbiati said at the time.
As it happens, Dixon pointed out Tuesday, Sprint has a lot of spectrum to work with.
“Bottom line, existing spectrum in the 2.5 GHz frequency band should sustain Sprint’s improved performance for the next six-plus years,” he wrote. “2.5 GHz spectrum is the basis of Sprint’s LTE Plus network and makes up the bulk of Sprint’s spectrum portfolio. Sprint controls approximately 120 MHz of 2.5 GHz spectrum in 90% of the top 100 U.S. markets.”
Dixon said Sprint’s success will hinge on Softbank’s ability to create “low-cost Pico and CPE solutions” that can take advantage of Sprint’s 2.5 GHz spectrum assets to densify the network.
Sprint has already started its small cell roll out.
In May, Sprint signed a deal with infrastructure solutions provider CommScope to execute an “extensive deployment” of small cells to support in-building LTE and Wi-Fi.
The deployment will utilize CommScope’s S1000 small cells, which are based on Qualcomm’s FSM small cell and VIVE Wi-Fi chipsets and support both 2.5 GHz TD-LTE and 802.11ac dual-band, dual-concurrent Wi-Fi.