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Sprint executives including CEO Dan Hesse and CFO Joe Euteneuer said they misjudged how long many commercial customers would keep Nextel service, in a meeting today with Wells Fargo Securities and investors.

Sprint (S) shares were down 11 cents, or 1.6%, to $6.80 in afternoon trading. Separately Tuesday, Sprint said it is cutting 800 customer-service jobs, the largest staff cut since SoftBank acquired a controlling position in the third-largest wireless carrier last month. Softbank has been buying more shares, this MarketWatch story revealed today.

In the detailed Wells Fargo Securities report, which didn't address staff cuts, J. Davis Herbert and Eric Fishel, high yield telecom analysts, said Sprint executives expect to complete 38,000 Network Vision sites by mid-2014 as part of the first phase of their network overhaul. The next piece: incorporating 2.5 GHz of spectrum. Management expects to reveal more details on phase two "at some point in the not-too-distant future."

As for the legacy Nextel customers, "because many of those accounts also had significant CDMA users, management expects churn to be pressured in the back half of 2013," write the Wells Fargo analysts. "Management admitted that it misjudged how late in the game many of its commercial customers would hang on to the legacy Nextel service."

However, already Chicago is one of the first large markets that Sprint is close to 100% complete with Network Vision. The result is better service, with fewer blocks and drops for both voice and data, and speeds dramatically increased (+58% for 3G and +680% for 3G/4G), according to Sprint. (That means less need for fielding complaints, Bloomberg reports. )

Sprint believes the 2.5 GHz spectrum is the unique asset that will give the company a competitive advantage in network capacity and speed over time, according to Wells Fargo. From the report on how Sprint thinks it can overtake Verizon Communications (VZ):

"Hesse pointed out that Verizon has the enviable position of owning the best network in the industry and it has paid off enormously. Sprint anticipates taking that position after it gets to point B (possibly over the next three years) by offering the "best network in the world." Management said tests have shown that once Sprint is through its entire overhaul, the speeds it will be able to offer are "blazing fast." Speed is something the consumer wants (as demonstrated by the demand for

Google

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) Fiber) and by the time Sprint can deliver, high-bandwidth applications could begin to be developed around that environment and the services Sprint could offer (e.g., machine-to-machine and broadband) could stand out from the competition ... Upon completion of Sprint's network overhaul, management expects 90% of its backhaul to be driven by Ethernet over fiber and the remaining microwave, which should help deliver the higher speeds and capacity."

On industry consolidation, Sprint management said:

Sprint would like to own more spectrum, and borrow at investment-grade rates over the next few years. From Wells Fargo, on debt and liquidity:

"Sprint fully intends to refinance the first-lien paper at Clearwire and may potentially wait until the call price drop in December before addressing the opportunity. As a reminder, Clearwire's 12% first-lien notes (close to $3 billion outstanding) are currently callable at 106, with the call price stepping down in December to 103. Management called it a "numbers game," which we believe to imply the timing of a refinance may be dependent on the primary market and the rate environment. We note that Sprint already has sizable debt maturity towers each year from 2016 through 2022, complicating a multi-tranche offering."

"Sprint is focused on a rough $34 billion capex plan of $8 billion in 2013, $8 billion in 2014, followed by $6 billion per year from 2015 to 2017 as outlined in the Softbank proxy. Should Sprint maintain its position of a $2 billion floor on cash, we believe this could potentially drive a cash need of $1 billion-2 billion ... to bridge to 2015."

Note that Wells Fargo received compensation for investment banking services from Sprint Nextel in the past 12 months, and intends to seek such business in the next three months.

The flurry of telecom network expansions has resulted in a rising number of worker deaths, the Wall Street Journal recently reported. Story here.