Nokia and Ericsson feel pressure due to Sprint deal with T-Mobile?

Ericsson and Nokia are some of the prominent suppliers to Sprint, a telecom operator owned by SoftBank of Japan.

Since Sprint, the fourth largest wireless operator in the U.S., will be grabbed by T-Mobile in a $26 billion deal , the pressure will be on both Nokia and Ericsson, the number two and three telecom equipment makers, to retain the business.

Finland-based Nokia and Sweden-based Ericsson reported lower income from North America in Q1 2018 as most telecom operators are aiming to enhance Capex after 6-12 months in line with their 5G roll out strategy.
Sprint Capex Q3 2017
The new T-Mobile owned by Deutsche Telekom’s 42 percent equity stake and SoftBank’s 27 percent stake, will be looking for reducing overlapping cost components. Since optimization of network cost will be one of the objectives of the deal, both Ericsson and Nokia will feel the heat.

Both Nokia and Ericsson were aiming to give their 5G equipment to Sprint starting in 2018 and beyond after trials. Nokia and Ericsson are also suppliers to T-Mobile US. This does not mean that Nokia and Ericsson will gain from the acquisition of Sprint by T-Mobile.

China-based technology companies Huawei and ZTE are not the prominent telecom network suppliers to Sprint. Sprint earlier faced sourcing of telecom equipments from Huawei due to national security issues.

Sprint investment program

Sprint earlier announced it was targeting a Capex of $3.5-$4 billion during fiscal 2017 as part of its network expansion strategy.

Sprint was the most improved operator in 2017 with a 60 percent year-over-year increase in its national average download speed, according to Ookla Speedtest Intelligence data.

Sprint was in the process of upgrading existing towers to leverage all three of the company’s spectrum bands – 800 MHz, 1.9 GHz and 2.5 GHz.

Sprint also built new cell sites to expand its coverage footprint and extend coverage to more popular customer destinations. Sprint added more small cells — including Sprint Magic Boxes, mini-macros and strand mounts to densify major market and boost capacity and data speeds.

The company has deployed more than 80,000 Sprint Magic Boxes in approximately 200 cities across the country and plans to deploy more than 1 million as part of its multi-year roadmap.

It aims to deploy 64T64R Massive MIMO 2.5 GHz radios to increase capacity up to 10 times that of current LTE systems and increase data speeds for more customers in high-traffic locations.

Massive MIMO, a key technology for 5G, will allow Sprint to support both LTE and 5G NR (New Radio) modes simultaneously without additional tower climbs.

Baburajan K