Sprint (NYSE: S) Chairman and SoftBank CEO Masayoshi Son is taking a more active role in planning Sprint's network densification project according to a report from Wall Street firm Macquarie Capital. Further, analysts there think Sprint is going to embark on a plan that will be primarily focused on deploying small cells.

Late last week Macquarie Capital analysts Kevin Smithen and Will Clayton met with Sprint CEO Marcelo Claure, CFO Joe Euteneuer and Chief Network Officer John Saw, as well as SoftBank and Sprint investor relations representatives at Sprint's headquarters in Overland Park, Kan.

Sprint confirmed earlier this month it has received approval from parent company SoftBank to proceed with its massive network densification program. Sprint is aiming to use the project to improve its data performance and speeds and enhance its LTE coverage. However, the carrier has stayed mum on the details and is still working on selecting vendors.

"While no specific financial or operational metrics were discussed at the meeting, we came away feeling that much has been happening behind the scenes and that Sprint's network plan is near finalization and a rapid, phased deployment over the next 18-24 months," the Macquarie analysts wrote. "We sense that the plan has been thoroughly vetted by SoftBank CEO Son-san, who has personally taken a more active day-to-day role in Sprint's network deployment, cost-cutting, and financing activities which, in our opinion, has resulted in recent progress on churn and improved network performance in several markets."



The analysts think Sprint is "embarking on a small-cell driven densification using" three-carrier carrier aggregation technology, likely on its 2.5 GHz spectrum. They also expect it to increase its use of dark fiber. Dark fiber, which is the practice of leasing fiber optic cables from a network service provider, is primarily targeted at wireless backhaul, enterprise customers and traditional carriers.

The Macquarie analysts think Sprint can complete its densification project with around $5 billion per year in capital expenditures "due to very large price reductions from equipment vendors." Sprint, the analysts note, "is done with the costly rip-and-replace phase" of upgrading tis 3G CDMA network and is "moving to more software driven capacity enhancements."

Finally, the analysts expect Sprint's total coverage to be 800,000 square miles, covering around 85 percent of POPs in the U.S., compared to around 2.2 million for AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ). They noted that Sprint needs to spend around one-third of what Verizon and AT&T do on capex for capacity because of its smaller subscriber base.



Interestingly, the analysts do not think Sprint needs low-band spectrum for the densification project, "but could be opportunistic" about next year's incentive auction of 600 MHz broadcast TV spectrum, and that Sprint "has potential creative off-balance-sheet funding options." They also think Sprint would sell 20 to 40 MHz of its 2.5 GHz airwaves if it got a good offer.



Claure said late last month at the Re/code Code Conference that within two years, Sprint will have the top network among U.S. carriers. He said that "you can expect in the next 18 to 24 months--hopefully you'll invite me two years from now--that our network will be ranked No. 1 or No. 2 in every single market." He later clarified that he meant No. 1 or 2 in the United States' major markets, according to CNET.

For more:

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