Analysts Skeptical About Sprint's Reliance on Small Cells

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Sprint held their quarterly earnings call today, and informed everyone that small cells and virtualization is helping them close the gap with their competitors network, and is one of the reasons that they have lowed capex guidance for the remainder of their fiscal year (which ends on March 31st, 2017). Needless to say, analysts are a bit skeptical about this. The company has lowered their capex guidance three times in the fiscal year, which means that they are spending less on their network. But on the other end of the spectrum, this is part of what has helped the nation's fourth largest carrier save about $1.6 billion in costs, helping them actually make a profit, instead of continuing down the path of losing money.

Sprint is still relying on their large spectrum portfolio, and saying that new technologies that they are adopting allow them to consistently improve their network, without killing their budget. Sprint has been using Massive MIMO, High Performance User Equipment as well as three-carrier aggregation to improve their network. Sprint's CEO, Marcelo Claure spoke with investors this morning and stated that they have deployed 200 small cells in Manhattan which has more than doubled their previous speeds. He also showed a number of test results from multiple third-party testing firms, that shows that the carrier is making great strides in their network and making it that much better.

Where analysts are skeptical is whether Sprint can keep this up or not. When you have the smallest network, and you are spending less and less on that market to improve it, build it out and evolve it, it makes it tough for you to keep up with the competition. which is precisely what happened to Sprint in the first place and put them so far behind their competitors. Of course, analysts don't get the whole story, there are still some factors that companies like Sprint will keep hidden, so only time will tell whether their network continues to get better, or if it starts to make a turn for the worse. Sprint did produce some great numbers for the previous quarter, and they are looking to do the same in the current quarter.

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