Making good on its plans to conduct a dramatic overhaul of its current cellular network, major US wireless carrier Sprint has decided to relocate its towers from real estate rented from Crown Castle and American Tower, to government owned land where the lease is significantly less expensive, according to Re/code. This move could allow Sprint to save as much as a billion dollars. Re/code’s report indicates that the relocation could begin as early as June of this year.
Apart from relocating its towers, Sprint is also planning to cut backhaul expenses by shifting away from using fiber optic cables owned by other major wireless carriers Verizon Wireless and AT&T. To date, Sprint pays about a billion dollars every year for those cables, but moving forward, it is looking to utilize microwave technology in order to connect its existing cellular towers to telecommunications networks.
It is a wide known fact among the industry that microwave technology is not primarily used by wireless carriers in the United States. However, Ericsson has predicted that this piece of technology will soon turn into the foremost backhaul before the end of this decade, shouldering backhaul for 65 percent of all cellular sites in America.
The reason for the shift in technology is that microwave is capable of delivering enhanced capacity. On top of that, microwave technology is actually more financially viable compared to fiber optic technology with the right application. Sprint’s network is currently being managed by Ericsson after both companies signed a deal worth $5 billion back in 2009.
Moving its towers is only part of Sprint’s overall cost cutting plans. Eventually, the wireless carrier is aiming to cut costs by $2 billion to $2.5 billion. Needless to say, after failing to record a profit since nearly a decade now, it is imperative for Sprint to start trimming its expenses now in order to halt its financial downward trajectory.
Last month, Sprint had stated that it would take a $150 million charge for severance and other costs borne of a round of layoffs which will likely continue through the first few weeks of 2016. As explained by Tarek Robbiati, the chief financial officer of the wireless carrier, the company is scrutinizing every aspect of its organization. Robbiati believes Sprint has too many overheads, and it is high time the American mobile service provider starts streamlining its operations in order to achieve optimum cost efficiency in the months or years to come.
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