Sprint is looking to slash nearly $1 billion in by relocating its equipment to cheaper-to-lease government land and reducing its dependence on backhaul provided by rivals Verizon and AT&T, Re/code reported Friday.
According to the report, Sprint is aiming to realize savings by cutting network costs associated with expensive tower space lease agreements with Crown Castle and American Tower. To do so, the carrier plans to move its radio equipment onto government-owned land, which comes with a lower lease cost, as soon as the middle of the year, Recode reported.
Additionally, Sprint will move to lessen backhaul expenses paid to competitors Verizon and AT&T by utilizing Clearwire’s microwave backhaul technology. Sprint closed its acquisition of Clearwire in 2013 around the time it completed its merger with Softbank.
Sprint did not immediately respond to a request for comment on the report.
The cost cutting measures are part of Sprint’s plan to cut upwards of $2.5 billion in expenses by the end of the year, and are in line with previous statements made by Sprint CFO Tarek Robbiati.
In December, Robbiati said – as he had before – that cuts will come from all departments across Sprint’s business, including roaming costs to other carriers, backhaul costs, IT, marketing, general and administrative expenses, sales, service and repair and real estate.
Robbiati said job cuts would “inevitably” be part of the cost reduction measures, but an exact number of expected terminations has not been released.
But more than just making cuts, Robbiati said at the time that the carrier is working to change the way it does business entirely.
“If you take the cost out without changing the way we do work, you will have cost creep coming back in,” he said in December.
In addition to cuts, Sprint has sought to save – and make – money in other ways.
In September, Sprint announced that it will not participate in the upcoming FCC incentive auction, saying its “rich spectrum holdings are sufficient.”
In November, Sprint announced a $1.2 billion lease back deal and 2.5 million device tranche to jumpstart its new, independent device leasing company, Mobile Leasing Solutions. A second tranche is expected sometime in the first quarter 2016.
At the time, Robbiati said the deal would “immediately improve the company’s liquidity position” and create a “repeatable structure to sell future leased devices.”
Earlier this month, Sprint became the final major U.S. wireless carrier to kill two-year contract subsidies in favor of promoting its device lease and easy pay options.
Filed Under: Carriers
