Sprint Corporation (S) has announced the expansion of its tri-band LTE network – Spark – to additional 6 markets, namely Dallas, Austin, Fort Worth, Houston, San Antonio as well as Fort Lauderdale, bringing the total to 11 markets. In addition, the company is also expecting to combine Spark with its Virgin Mobile brand to offer high-speed LTE services to its prepaid customers. We expect the expansion of Sprint Spark to promote its wireless services and add new users to its subscriber base.
Sprint, which competes with players like AT&T, Inc. (T), initially launched the Spark service in key cities like New York, Los Angeles, Chicago, Tampa and Miami. With the ongoing success of Spark, the company plans to expand the service in 100 key cities in the U.S. during the next three years. In addition, it plans to add 100 million customers under the Spark coverage by end of this year.
Under Sprint’s Network Vision strategy, its LTE services currently cover over 130 markets with 26,000 sites on air and 90% or over 35,000 sites completed or under construction. In 2013, the company expects to have LTE coverage for approximately 200 million PoPs and incorporate 1.9 GHz network modernization by mid 2014. We believe the efficient use of capital, reduction of cell sites, the elimination of dual networks, backhaul efficiencies, reduced churn, lower roaming charges and energy cost savings bode well for Sprint.
Hence, the network restructuring is expected to generate $10 billion to $11 billion in savings over the next seven years (2011–2017). Moreover, Sprint’s OBITDA margin is expected to grow by 1200–1600 basis points by the end of 2014. About half of the margin expansion would come from the Network Vision plan and the other half from its core operations.
Sprint has a Zacks Rank #3 (Hold).
Other Stocks
Better-ranked stocks in this sector include Hawaiian Telcom Holdco, Inc. (HCOM) and Level 3 Communications, Inc. (LVLT). Both carry a Zacks Rank #1 (Strong Buy).
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment