Sprint-AH-00118

Sprint to Shed $1B in Costs by Changing Network Plans

January 15, 2016 - Written By Alexander Maxham

As Sprint is looking to decrease costs for the company, it’s looking to the network first. Where plans were made public that could cut costs by around $1 billion, annually. Sprint, since being bought by SoftBank, has been burning cash pretty quickly, and is quickly running out. The company’s CEO, Marcelo Claure had announced that layoffs were coming. And he’s expected to make them prior to January 30th. However, these changes to what they are spending on the network could save jobs in the future.

One thing that Sprint is looking to do is move their radio equipment from non-government owned towers on over to government owned towers. This will drastically reduce the cost for Sprint. Seeing as towers are one of the bigger costs for a carrier, this should help them out tremendously. Sprint is also looking to relying on backhaul from AT&T and Verizon. Currently they use their high-speed fiber-optic cables to link mobile switches and cellular towers. By doing this, they can cut a big part of their operating costs. Each year, Sprint pays the two carriers around $1 billion in fees for using their fiber-optic cables.

As you might expect, this is only the beginning for Sprint and cutting their costs. While Sprint is dropping rates for plans they are selling to customers, they also need to tighten their spending – as less cash is coming in. This is a tricky situation for Sprint, because they have a network that needs some help and taking cash from the network isn’t going to be as helpful as throwing more cash at it. Sprint was the number three carrier in the US, and in 2015, T-Mobile took that spot from them. Effectively moving Sprint on down to the fourth spot and being the smallest national carrier in the country. But Sprint isn’t giving up. Expect loads more changes for Sprint as they look to continue to decrease their costs annually. We might see another round of layoffs later this year as well. However, we are optimistic that these changes can help save some workers jobs. The last thing anyone wants, is to be laid off.