Sprint WiMAX, CDMA spend falls

“Largely as a result of refocusing our capital deployments on retention instead of growth, our network team added 80% fewer sites in the first half of 2008 when compared to 2007,” Burst said at Sprint’s earnings call. “In 2008, investments have been targeted at enhancing coverage and capacity within the existing wireless footprint. In light of the subscriber trends, our capacity needs have been limited to a few specific geographic locations where platform-specific subscriber and usage trends support that investment.”

Wireless was the biggest spending area to take a hit. First-half capex for wireless fell from $2.8 billion in 2007 to $1.3 billion in the first six months of this year. Wireline investments took a slight dip in the same period—from $289 million to $261 million—as Sprint continued to invest in its MPLS and cable VoIP networks. One surprise, however, was that Sprint scaled down its WiMAX spend drastically in the second quarter. After spending only nominal amounts in 2007 on its new 4G network, Sprint upped its WiMAX spend in the first quarter to $236 million, as the operator started the site planning and equipment purchases for its initial WiMAX deployments. In the second quarter, however, Sprint’s WiMAX spend fell to only $100 million. The discrepancy might be explained by the fact that Sprint and Clearwire announced the rebirth of their proposed WiMAX joint venture mid-quarter, which may have caused Sprint to shut off the 4G spigot until the deal closes later this year. The venture will bring in $3.2 billion in capital from Intel, Comcast, Google and other investors—funds that will be used to start the nationwide buildout. While the proposed venture undergoes regulatory scrutiny, Sprint has pledged to continue with its initial network launch, starting with Samsung’s deployment in Baltimore in September. Sprint has committed to launch another Samsung network in Washington, D.C., and a Motorola network in Chicago by the end of the year, but it hasn’t offered any updates on its other planned launches, including NSN’s planned large-scale rollout in Texas.