Sprint capacity spectrum holdings
Previously in this series, we learned that Sprint CEO Marcelo Claure plans to improve the company’s network performance to compete with market leaders Verizon (VZ) and AT&T (T). According to RootMetrics’ national results, Sprint’s rank in terms of overall network performance was third among the top four US wireless carriers in 2H14.
However, the wireless carrier’s network speed and data performance remained the worst in 2H14. Claure plans to harness the company’s significant high- and mid-band capacity spectrum holdings to improve its network performance.
These capacity spectrums cater to high-network traffic and are particularly useful in managing high-data traffic, including the growing volume of video traffic on mobile devices. These high-capacity bands are particularly useful for users of smartphones—such Apple’s (AAPL) iPhone. These smartphone users tend to use significant amounts of data.
Sprint’s network densification
Sprint plans to implement a considerable densification program to harness its capacity spectrum holdings, making capital expenditures of ~$5 billion in fiscal 2015. Sprint’s planned fiscal 2015 capital expenditure includes funding for its network densification efforts in the high-band 2.5 GHz (gigahertz) spectrum. The 2.5 GHz spectrum has high capacity to manage network traffic. This densification effort can help to improve Sprint’s network speed and data performance.
According to Sprint, its densification initiative has the support of SoftBank, which owned ~79% of Sprint at the end of fiscal 4Q14.
Instead of investing in Sprint’s stock, you may take a diversified exposure to the company by investing in the iShares US Telecommunications ETF (IYZ). IYZ held ~4.4% in Sprint as of June 30, 2015. You may even take a more diversified exposure to the company by investing in the iShares Russell 1000 Value ETF (IWD). This ETF held ~0.03% in Sprint at the end of June.