Analysts Concerned about Sprint Lowering Capex Spending

During Sprint's earnings last week, the carrier announced that they were cutting Capex spending to about $3 billion for the fiscal year (which started May 1st). Analysts had expected the company to spend around $4.5 billion for this fiscal year - Sprint initially had planned $15 billion over the next three years - and it's leaving many analysts wondering what kind of plans Sprint has up their sleeves. As Sprint has arguably the worst network in the country. It has improved quite a bit in the past year or so, under Marcelo Claure's leadership, but there's still plenty more that needs to be done. And spending less on their network isn't one of those things.

BTIG analyst, Walter Piecyk stated in a research note that they "think Sprint's aggressive cut to capital investment and continuing lack of evidence on any activity to improve its network raise red flags about the company's strategy." Piecyk also noted that "this low level of capital investment was last seen in 2008/2009 during the financial crisis." A report that came out earlier this year, noted that Sprint was looking to use small cells and relocate their towers to government-owned land, and that would save them around $1 billion annually. Sprint's CEO, came out and said that the information in that report wasn't correct. Claure said last week that small cell deployments do typically need approval of local governments, and that can lead to deferred investments in their network.

The change in Capex spending for the year has concerned many analysts. Given that there is still a lot of heavy lifting that needs to be done on Sprint's network - even though Claure claims that was all done in Network Vision - analysts aren't too sure what the rest of 2016 has in store for the company. Piecyk also noted that they have both a Sprint and an AT&T smartphone at their office, and have been using them for the past few months. Noting that the Sprint phone is much slower and less reliable, unless it is near a small cell or 2.5GHz deployment. Which are few and far between. Piecyk also mentioned that the difference they are experiencing on these two phones are much wider than what the Root Metrics scores dictate.

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Alexander Maxham

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Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]
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