How the Sprint and T-Mobile Merge has Affected Small Cell Power
Update On The Sprint and T-Mobile Merge
T-Mobile and Sprint, the third and fourth largest carriers in the U.S., have been nearing their final merge for quite some time now. The merger announcement of Sprint and T-Mobile has prompted analysts to believe that major tower companies across the nation will be affected. According to analyst reports, American Tower appears to be positioned to benefit whereas Crown Castle the opposite. Analysts do indicate that there are some caveats to the positions.
The management of both companies have stated that T-Mobile’s network will serve as the foundation of the merger network. The implications of this plan involve the decommission of around 35,000 Sprint towers. Thus the impact of the merger on the tower companies is dependent on whether the plan to decommission most Sprint towers follows though.
Currently, T-Mobile and Sprint operate a total of 110,000 towers, which would decrease by 35,000 towers and increase by 10,000 new towers from the merge. The net total of 85,000 towers would be joint with the plan to increase the number of small cells to a total of 50,000 cells after the merge. The overall merger will essentially render one of the nationwide tower companies out of play, but that alone does not spell disaster for the small cell power space.
In a letter to investors, Wells Fargo wrote that T-Mobile and Sprint plan to invest $40B over three years, which will no doubt be partially spent on alignment as well as the initiative towards increasing the number of small cells in operation. Overall, this merge and its far-reaching impact should not come as a surprise as the merger has been proposed multiple times in the past.
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