ORLANDO, Fla.—Sprint’s network overhaul will drop the number of cell sites it operates by 44 percent, executive Bob Azzi said at a conference today. The $5 billion project, dubbed Network Vision, will slash Sprint’s cell sites from 68,000 to 38,000,
The company reported a net loss of $1.3 billion for the quarter, and $2.9 billion for the whole of 2011.
The company reported total net subscriber additions of 1.6 million during the quarter, the best quarterly result in six years and bringing total subscribers to the highest level in Sprint’s history.
Now serving roughly 55 million customers, the company said it is seeing “strong iPhone sales”, selling 1.8 million of the popular smartphone in Q4, of which 40 percent was to new customers.
However, the iPhone launch also had a negative impact on its balance sheet, due to increased equipment net subsidies and sales expenses, the company said.
From the press release:
Strong revenue growth and cost management partially offset the impact of increased equipment net subsidies and sales expense associated with the successful launch of the iPhone. Forty percent of Sprint’s 1.8 million iPhone sales in the fourth quarter were to new customers.
Based on internal estimates, including incremental costs associated with iPhone sales, the combined impact of iPhone and Network Vision costs reduced fourth quarter Adjusted OIBDA margin, which was 10.8 percent, by approximately 8.8 percentage points.
Based on internal estimates, Sprint Nextel says the combined impact of iPhone and Network Vision costs reduced fourth quarter Adjusted OIBDA of $842 million by approximately $684 million.
In case you were wondering: OIBDA is operating income (or loss) before depreciation and amortization. Adjusted OIBDA excludes severance, exit costs, and other special items.
Not wanting to be outdone by their larger rivals, Sprint also has a big LTE-related announcement today. Sprint CEO Dan Hesse just confirmed to everyone at Citigroup’s 22nd Global Entertainment, Media and Telecommunications Conference that Atlanta, Dallas, Houston and San Antonio will be the company’s first LTE markets.
Those cities are just the tip of the iceberg though, as Sprint ultimately wants their LTE network lit up in ten markets before the first half of 2012 rolls around. Sprint also lit up their first LTE tower cluster in Kankakee, Illinois of all places, so I’d expect Chicago to taste those high speeds before long, but the other launch markets remain a mystery.
According to a tweet from Sprint’s official Twitter account, those markets will also receive an upgrade to their 3G network as well but the 140 character format doesn’t exactly lend itself well detailed explanations. It likely has to do with the multi-mode base stations Sprint has been deploying as part of their Network Vision plan, which are meant to help the streamline their network(s) by consolidating cell sites.
The news should come as a welcome surprise to Sprint customers who have been stranded without 4G coverage, as Sprint and off-again-on-again network partner Clear’s WiMax rollout has recently crawled to a standstill. By the time that their first LTE markets go live, it will have been almost exactly two years since Sprint’s Evo 4G was released. Customers itching for 4G where there was none before should be able to move into a LTE device with a minimum of contract-related headaches, and they may finally be able to justify paying that $10 premium data fee.
Today Sprint CFO Joseph Euteneuer said that the company plans on launching 15 LTE-capable devices next year, though they may be coming a little later than expected — the latter half of 2012, to be exact. The company had originally hoped for mid-summer launches with its first LTE-capable hardware, though either date is much later than the competition. Verizon is clearly up and running in the 4G LTE department, and AT&T is getting there.
Then, there’s Sprint.
The number three carrier is currently banking on its 4G WiMax network (courtesy of Clearwire). And by a slippery twist of events — including Clearwire’s once-impending interest payment and Sprint’s flat-rate bailout of said interest payment (among other things) — Sprint will probably get to hold on to its unlimited data plans for a little while longer. In fact, CNET reports that Euteneuer suggested Sprint would be doing more with unlimited data down the line, though unfortunately that won’t extend to LTE.
While Sprint has preemptively pledged $350 million to help provide support for Clearwire’s LTE rollout, the terms of last week’s agreement state that Sprint will be making usage-based payments for Clearwire’s LTE services. In other words, so will we.
According to Sprint’s Network Vision strategy, Sprint plans to cover 120 million people by the end of next year, and 250 million people by the end of 2013. Headway has already been made, too, deploying the first multi-mode base (that runs both 3G CDMA and 4G LTE).
Holding on to unlimited data, even if its WiMax data, will be important for Sprint moving forward. But the carrier’s push into LTE territory is what really counts, so hopefully we’ll see some top-notch devices supported by a solid LTE network in time for Christmas. Next year, of course.
Sprint put on its knight-in-shining-armor hat this morning, agreeing to pay $1.6 billion over the next few years to access Clearwire’s WiMax network. Without it, Clearwire would have had to choose between paying up on a $237 million interest payment or continuing to build out its LTE network — a necessity in terms of competition for both Clearwire and Sprint.
The deal consists of Sprint paying $926 million for unlimited 4G WiMax services between 2012 and 2013, reports MocoNews. In the meantime, Sprint is also pledging an advance of $350 million paid over a two-year period for Access to Clearwire’s forthcoming LTE capacity (as long as Clearwire hits certain benchmarks along the way). This will allow Clearwire to pay off its debt without derailing plans for its LTE network. That said, Sprint needs LTE just as desperately, so it only makes sense that Sprint would cover for its struggling partner.
The agreement allows for Sprint’s use of the WiMax network through 2015, though it’s only committed through 2013, at which point it will hopefully be transitioning to LTE. After 2013, the deal moves to a usage-based pricing model for access to the WiMax network. The deal also outlines long-term usage-based pricing models for Clearwire’s LTE services through 2012.
Sprint CEO Dan Hesse affirmed the relationship, issuing the following prepared statement:
These agreements are a result of the technical MOU we outlined during our third quarter results call and extend our relationship with Clearwire. It provides Sprint improved pricing, allows us to continue to provide WiMAX 4G services to our customers today and to new customers in the future and provides additional LTE capacity to help complement our Network Vision strategy and meet our customers’ growing data demands.
Clearwire’s $237 million interest payment was due today, so this deal couldn’t have come at a better time.