SellTower Signals

Working Together…A Novel Concept

Many news articles and bloggers have talked about a pending network sharing arrangement between LightSquared and Sprint.  These talks also fueled much speculation about the ultimate disposition of Clearwire.  The most popular version being that Sprint was leaving Clearwire for the better spectrum & political contacts of LightSquared.

On April 7, Credit Suisse provided enough details about a potential deal to lend credibility to the claim that both LightSquared and Clearwire are set to network share with Sprint.

This full Radio Access Network (RAN) share agreement provides benefits to all three parties.  Of course the introduction of RAN share into the US market may have dramatic impacts to the way Cricket and MetroPCS (NYSE:PCS) deploy their networks as well.

Sprint will receive significant capital funds to help with its Network Vision upgrade project.  Both Clearwire and LightSquared will be able to deploy networks using their owned spectrum and self-operated core networks at a much lower cost than traditional network build outs.  Just by sharing BTS and antenna equipment with Sprint, a minimum of $20,000 in site acquisition costs and $40,000 in construction and installation costs can be avoided for each new cell site.  Further operational savings will come from lower rents, shared backhaul, and shared maintenance and compliance costs.

There are some risks to Sprint, however in such an arrangement.  For example, tower companies like American Tower (NYSE:AMT), Crown Castle International (NYSE:CCI), and SBA Networks will almost certainly have provisions in their master license agreements (MLA’s) that force Sprint to pay new collocation rents and fees for deploying equipment that broadcasts in new spectrum ranges.  If Clearwire or LightSquared falter in year to come, Sprint will be one left meeting these collocation obligations.

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