Sprint Secures Plan to Modernize Its Network. But at What Cost?

Apparently, Sprint and majority owner SoftBank have agreed on the details of a large-scale effort to overhaul the company’s sluggish network to make it more competitive with rival carriers. It’s a plan that CEO Marcelo Claure and SoftBank chief Masayoshi Son have hammered out over the past several months along with network experts at both companies. Claure teased the broad strokes of the plan at May's Code Conference, shortly after returning from a key trip to Tokyo. “Expect in 18 to 24 months … our network will be No. 1 [or] 2,” Claure said.

While a boost in speed and coverage would help Sprint attract new customers, it will also add significantly to Sprint’s costs. The company has scaled back its spending on network gear in recent years, but industry experts said Sprint will inevitably have to boost its spending from current levels in order to meet Claure’s new goal. The financial impact of a network overhaul can be spread over multiple years, but when you throw down the gauntlet that your network will be No. 1 or No. 2 in the next 18-24 months, it not only suggests a material increase in spending but also some immediate vendor decisions.,” BTIG analyst Walter Piecyk wrote. That will also have an impact on Sprint customers, with Claure suggesting that Sprint will either have to do away with unlimited data or, at a minimum, raise prices on such plans.