American wireless carrier Sprint said it would cut Capex (capital spending) to below $6 billion for calendar year 2014 from an earlier estimate of $8 billion.
The slash in Capex is happening at a time when Sprint is rolling out its 4G LTE network and enhancing quality of its wireless networks. Unable to meet tough competition from AT&T, Verizon Wireless and T-Mobile US, Sprint posted postpaid net losses of 272,000 in the third quarter.
Sprint admitted that the significant loss of postpaid phone customers over the last few quarters has impacted its wireless service revenue. Since the trend is expected to continue into Q4 2014, Sprint said its adjusted EBITDA will be $5.8 billion to $5.9 billion for calendar year 2014.
The reduction in Capex will have an impact on global telecom network vendors such as Alcatel-Lucent, Nokia Ericsson, Ericsson, Huawei, ZTE, etc.
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In 2013, Sprint’s Capex was $7,451 million against $5,370 million in 2012. Out of this, Sprint’s wireless Capex was $3,243 in 2013 as compared with $4,884 million in the previous year. The #3 U.S. mobile provider invested $155 million towards Capex in wireline in 2013 against $242 million in 2012.
Sprint said 4G LTE coverage in the third quarter expanded to 260 million people. Sprint 2.5 GHz LTE deployment now covers 92 million people and remains on track to hit 100 million by the end of the year. The company did not say whether the cut in Capex will impact the roll out plans.
Baburajan K
editor@telecomlead.com
