Sprint LTE Upgrades

Sprint in their 2013 2^nd Quarter earnings calls had some interesting things to say:

1. The average revenue per user (ARPU) has reached its highest point for Sprint at $64.20 per month.  I suspect this means that Nextel previously had a higher ARPU than $64.20 since they take the pain to state that it is on the Sprint platform.
2. They are making progress on their Network Vision- LTE installation.   They have 20,000 sites on air, 30,000 either ready for construction or in construction, 35,000 where zoning is approved, and 34,000 where leasing is complete.  I would be curious what they mean when they say leasing is complete.  Do they mean that landowners/tower owners have signed their consent forms or a lease amendment or do they include sites where they believe they don’t need consent.
3. While they deem it a success, they could only keep 44% of the Nextel subscribers since they started working to recapture them in 2011.   I guess if you call 50% churn over 2 years good, then yes, this was a success.
4. Sprint is in the process of shutting down 20,000 Nextel cell sites and believe that those sites will be down within 90 days.  That doesn’t necessarily mean that 20,000 leases were terminated.
5. As it pertains to Clearwire, Sprint intends to migrate over the 2,000 Clearwire sites that already have been upgraded with LTE.  Sprint does state in the Q&A that they intend to add 2.5MHz frequencies to each of their 38,000 remaining cell sites.   They also state that 2.5MHz will also be installed on more than 38,000 sites due to the smaller effective radius of that spectrum.   This might suggest that some Clearwire sites will be kept even in areas where there is a Sprint site if they aren’t too close together.
6. Sprint believes that it isn’t the fact that a user has an unlimited data plan that drives usage but whether the users has an LTE device or not.  This bodes poorly for AT&T and Verizon who announced that 50% of their phones upgrades are non-LTE devices.

What does all this mean?  That Sprint will continue to push LTE devices to the market because of their superior spectrum holdings.  This gives them an advantage over AT&T and Verizon to a lesser extent who can’t match Sprint on spectrum.  Look to see a faster push by Sprint to finish up the remaining 18,000 sites that are not on air with LTE.