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Sprint at the Wells Fargo Media & Telecom Conference 2017

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Sprint at the Wells Fargo Media & Telecom Conference 2017 PART 3 OF 10

Why Sprint Plans to Dramatically Increase Capex in Fiscal 2018

Sprint’s capital expenditure

Sprint (S) is constantly investing in capex (capital expenditure) to improve its network. During fiscal 2Q17 (quarter ended September 2017), the telecom (telecommunications) company spent $0.68 billion on cash capex, excluding devices leased through indirect channels. That compares to 1.1 billion in fiscal 1Q17 and 0.47 billion in fiscal 2Q16. The YoY (year-over-year) growth was mainly due to higher network spending as the carrier looks to ramp up its densification initiatives. The sequential decrease was driven largely by the timing of cash payments for network activities.

During the Wells Fargo Media & Telecom Conference on November 8, 2017, Marcelo Claure, Sprint’s CEO (chief executive officer), spoke about the company’s capital spending going forward. He said that Sprint plans to dramatically increase its capex in fiscal 2018, probably to $5 billion–$6 billion. He added, “As we plan to enhance dramatically the coverage that Sprint has today, and for that, we plan to use traditional deployment, utilizing traditional macro deployment. We plan to upgrade every single tower that we have today to a tri-band. Today less than half or about half of the towers we carry — only carry 2.5.”

Why Sprint Plans to Dramatically Increase Capex in Fiscal 2018

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Expected capex investments in 2017

Sprint’s management continues to expect its cash capex to be $3.5 billion–$4 billion in fiscal 2017 (year ended March 2018), excluding devices leased through indirect channels. In comparison, Verizon (VZ) anticipates capex of $16.8 billion–$17.5 billion, and T-Mobile (TMUS) expects cash capex of $4.8 billion–$5.1 billion, excluding capitalized interest for 2017. AT&T (T) is anticipated to spend $22 billion on capex in 2017.

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