Sprint, America’s 4th largest wireless carrier, will accelerate investment in its network, as it plans a future as a stand-alone company. Sprint CEO Marcelo Claure said at an investor conference on Wednesday that the company could spend more than its previous estimation of $5-6 billion per year on capital expenditures. Cash on hand could dip next year as it builds out its network.
“I would call that the lower end. If it’s possible, we’re actually going to spend more,” Claure said. “We came to the realization that we’re still far away from what the Sprint network can actually deliver. I don’t think we’ve put all our assets to work.”
Sprint and number three U.S. wireless carrier T-Mobile said on Saturday they have called off long-speculated merger talks. The companies were supposed to create a combined U.S. wireless company to rival market leaders AT&T Inc (rank #1) and Verizon Communications Inc (rank #2).
Claure said the talks fell through because SoftBank Group (which owns a majority of Sprint shares) CEO Masayoshi Son was not prepared to relinquish control of Sprint.
“We’re always going to be open to looking at possible alternatives,” said Masayoshi. “We believe that eventually there’s going to need to be a tie-up between a telco and a cable company. We’ve been successful in certain areas, and to be fair we haven’t been successful in others, so we’re going to go with a more traditional build-out. I think our friends at the tower companies are going to be very happy.”
Claure also said that Sprint is racing against the clock, recognizing that the company’s ability to steal customers from other carriers depends heavily on its network. He called the current network “good” and “competitive” but added, “I would like the opportunity to have Sprint compete when we have the best network.”
Sprint shares rose 4.2%, to $5.99 in early afternoon trading after the announcement.