uploads///Telecom Sprint Q Capital Expenditure

What’s Sprint’s Capex Estimate for Fiscal 4Q16?



Sprint’s capital expenditure

In this article, we’ll look at Sprint’s (S) expected spending on capex. Sprint continues to invest in capex to improve its network. Its management expects its cash capex to be in the range of $2.0 billion–$2.3 billion in fiscal 2016, which ended March 2017, excluding the impact from leased devices sold through indirect channels. The carrier expects that this spending should accelerate going forward, as the company has secured more small cell permits to execute on its densification plan.

In fiscal 3Q16, Sprint spent just over $1.2 billion on cash capex, up from $0.8 billion in fiscal 2Q16 and down from $1.6 billion in fiscal 3Q15. The main reason for this significant YoY (year-over-year) decline was lower network spending.

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Expected capex investments in 2017

Sprint has not yet provided any capex guidance for fiscal 2017. However, the company expects capex to ramp up going forward as a part of its densification program. By comparison, competitor T-Mobile (TMUS) forecasts cash capex for the full year 2017 in the range of $4.8 billion–$5.1 billion excluding capitalized interest. Verizon (VZ) expects capex to come in between $16.8 billion and $17.5 billion in 2017, whereas AT&T (T) is expected to spend approximately $22 billion on capex in 2017.

T-Mobile and Sprint have lower operating cash flows

T-Mobile’s and Sprint’s lower spending on capex comes from their lower operating cash flows and the rising debt on their balance sheets. AT&T and Verizon generated $39.3 billion and $22.7 billion, respectively, in operating cash flow in 2016, which gave them leeway to direct more cash flows toward capex.


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