Sprint's Claure: Tower companies 'going to be very happy' with our capex

Sprint CEO  Marcelo Claure said Thursday morning the carrier will up its network capex in a big way beginning next year, confirming SoftBank CEO Masayoshi Son’s vow to double down on its U.S. operator.

And it will go back to a more traditional playbook to do so.

The nation’s fourth-largest wireless network operator has lowered its capex guidance several times over the last two years, raising the eyebrows of analysts who have questioned its ability to keep pace with the network upgrades of its rivals. But Son said on Monday that SoftBank not only will increase its stake in Sprint from 83% to 85%, but it will also roughly triple Sprint’s capex to a range of $5 billion to $6 billion beginning in a few quarters.

And that forecast may be shy of Sprint’s actual network spend, Claure said during an investor conference this morning.

“What I think we plan to do next year is dramatically increase our capex. I think Masa mentioned $5 to $6 billion; I would call that the lower end,” Claure said. “If it’s possible we’re going to actually spend more.”

Sprint has also been criticized for trying to cut costs by focusing on small cells to densify its network, minimizing its spending on traditional towers. But that strategy hasn’t always been as effective as the carrier hoped, and Claure said Sprint will make macrocells a higher priority as capex ramps up.

“The last year and a half, two years have been a great learning experience. We’ve tried to disrupt the way networks get built. We’ve been successful in certain areas and, to be fair, we haven’t been successful in others,” he conceded. “So we’re going to go toward a more traditional network build-out. Our friends at the tower companies I think are going to be very happy.”

Claure added that fewer than half of its towers currently access the carrier’s valuable 2.5 GHz spectrum. Sprint expects all its macrosites to support triband spectrum.

Sprint still faces a mountain of debt, of course: It’s $38 billion in debt, about half of which will come due over the next four years. But Claure said the carrier’s ongoing cost-cutting efforts continue to prove successful, and its innovative financial mechanisms such as its handset-leasing program and its ever-improving cash position will help finance the network investments.

“Sprint will have the ability for sure to meet its obligations. The first thing we have (address) is liquidity. We sit in a good position: We have over $11.3 billion, $11.4 billion of liquidity, and out of that $6 billion-plus is in cash, so that gives us enough cash to basically fulfill our obligations,” he said. “The fundamentals of the business are generating cash. And that’s something that, you just have to look at the evolution of the business over the last three years, it’s just been getting better quarter after quarter.”