How Sprint Could Benefit from Agreement with Altice USA
Deal with Altice USA
In November, wireless carrier Sprint (S) announced a strategic MVNO (mobile virtual network operator) agreement with Altice USA (ATUS). As part of the deal, Altice would get access to Sprint’s nationwide cell phone network and launch its wireless carrier service. Altice, the fourth-largest cable company in the United States (SPY), would be able to provide mobile voice and data services to subscribers across its national footprint using Sprint’s extensive network. In return, Altice would leverage its network to support Sprint’s network densification program and build out its 5G (fifth-generation) services.
During the Wells Fargo Media & Telecom Conference on November 8, 2017, Marcelo Claure, Sprint’s CEO (chief executive officer), spoke about the MVNO agreement with Altice. He said, “It’s very different than a traditional MVNO. It is one in which we have full access to Altice’s backhaul. We have full access to cable infrastructure, and we like that because it’s going to allow us to prove what can a combined — from an infrastructure perspective, what a combined telco cable can do.” Claure used small cell builds on Long Island as an example of this type of opportunity.
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Growth in mobile video traffic
The growing focus on the wireless business from media and telecommunications companies has been mainly driven by growth in mobile video traffic. According to Cisco Systems’ (CSCO) VNI (Visual Networking Index), it’s forecast that by the end of 2020, video could comprise about 77% of mobile data traffic in the United States.