Sprint Corporation (S) has extended its super-fast LTE data speed service, running on 2.5 GHz spectrum, to 16 new markets, including Charlotte, NC, and Indianapolis, IN. This brings the company’s overall number of LTE 2.5 GHz markets to 62, covering in excess of 100 million people.
Notably, with this, Sprint now covers 552 markets and around 260 million people under its LTE network, mostly in the 1.9 GHz band. Moreover, the carrier aims to expand its 2.5 GHz LTE coverage to further cities across the country. Moreover, Sprint is working toward establishing its LTE service in the 800 MHz bands to improve indoor coverage and boost speeds. The company expects to complete LTE roll out by the end of 2015.
In 2013, the company launched Sprint Spark, which integrated the company’s 800 MHz, 1.9 GHz and 2.5 GHz spectrum with devices offering tri-band capability and high-definition voice. Furthermore, by using enhanced techniques like carrier aggregation for higher speeds coupled with modernization of its network infrastructure, the carrier aims to provide the best-in-class high speed data experience to its customers.
On the downside, Sprint seems to have landed itself in hot waters with the Federal Communications Commission (FCC) planning to penalize the company for $105 million on grounds of unauthorised billing. Sprint has received nearly 35,000 customer complaints pertaining to unsolicited charges deducted for text message alerts, sports scores, horoscopes, ring tones and other unwanted services, across a three-month period from Aug to Oct 2013. Such practices by telecom operators are commonly known as cramming.
We believe, the penalty, if finally imposed, will possibly mar Sprint’s reputation. This is of considerable concern given that the company has already been in a troublesome position since the previous quarter.
In another development, earlier this month, Sprint intensified the wireless pricing war in the U.S. after the company claimed that it will reduce the phone bills of AT&T (T) and Verizon Communications’ (VZ) customers by 50% if they switch to Sprint’s network. This move to poach customers from rivals appears to be a desperate bid on Sprint’s part to revive its customer-base after losing subscribers over a long time.
Sprint currently has a Zacks Rank #4 (Sell). A better-ranked stock worth considering in this industry over the near term is Vonage Holdings Corporation (VG), with a Zacks Rank #1 (Strong Buy).
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