Sprint Corporation (NYSE: S) is leveraging its industry leading spectrum position to deliver unmatched network speeds. The carrier intends to leverage its 2.5 GHz spectrum portfolio (120+ MHz) and various technologies (8T8R, MIMO, carrier aggregation, TDD) to deliver industry leading data speeds.
In addition to having the most spectrum for LTE, Sprint has the largest holdings of high frequency spectrum. Historically, higher frequency bands, such as Sprint's 2.5 GHz licenses, have been viewed as less attractive due to their limited propagation characteristics, which made them inefficient for establishing wireless coverage.
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However, Sprint has more spectrum free-and-clear to deploy. While most of this is 2.5 GHz, the value of higher frequencies will increase materially because they enable carriers to build denser LTE networks capable of delivering higher speeds.
Sprint's network is expected to evolve over the next 2 years. With Clearwire, Sprint now has 55k macro cells.
"Over the next 2 years, the emphasis will mostly be on upgrading these sites to support its tri-band (800 MHz, 1900 MHz, 2500 MHz) LTE configuration with a growing emphasis on densification and small cells in 2016+," Deutsche Bank analyst Brett Feldman said in a client note.
Th key technologies that will support its tri-band network include 8T8R radio and antenna configurations, MIMO antennas, carrier aggregation, TDD LTE and HD voice. The tri-band platform is branded Sprint Spark.
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Sprint recently launched its first 5 Spark markets which are LA, Chicago, NYC, Tampa and Miami. These and future Spark market launches will occur when Sprint has deployed substantial LTE coverage using its 1900 MHz and 800 MHz licenses and at least 25% of POPs with its 2.5 GHz licenses.
At a recent demo, Sprint showed a video ! game played over the cloud via Sprint's commercial LTE network. The demo achieved 8 Mbps and low latency (40-50 Msecs), which Sprint expects to tighten over time. Four simultaneous 4k HD video streams supported by a single sector of a cell site that delivered 1 Gbps over Sprint's 2.5 GHz spectrum.
Various macro sites are supporting 2.5 MHz. In order to upgrade an existing site to support 2.5 GHz TDD LTE, Sprint simply needs to add an antenna, a remote radio head on the top of the tower and a small amount of equipment in the cabinet.
"Sprint's existing master lease agreements with the tower companies already outline pricing for this gear, so while Sprint will need to pay more add it upgrades its sides, there is no need to have additional discussion on lease amendments," Feldman noted.
Sprint demonstrated that it was able to deliver 1.3 Gbps of capacity to a single sector using 60 MHz of its 2.5 GHz spectrum. In a loaded network, this should yield average speeds of 12-15 Mbps per sub with peak speeds of 50-60 Mbps. These speeds increase in proportion to how much additional spectrum Sprint uses.
Meanwhile, six tri-band smartphones are launching this quarter. There are 3 OEM partners using multiple chipsets and various tiers/price points. Sprint already sells 3 data-only tri-band devices.
Post paid trends should remain unchanged until network performance improves in mid-14. At that point, better gross adds and churn should drive a return to post paid sub growth, although this will likely be supported by increased marketing spend.
"For 4Q13, we estimate net post paid losses on the Sprint platform of 276k and total post paid losses of 426k (mostly due to Clearwire churn). The projected Q/Q improvement in Sprint brand losses mostly reflects an outlook for seasonal uplift in gross adds as we see Sprint churn remaining elevated at 2% as the carrier works through its network rebuild," Feldman added.
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As a result, investors could expect a turnaround in the second half of 2014 as Sprint expands the tri-band LTE network.
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