Sprint's Draper: Access to competitive wholesale backhaul will drive wireless network growth, services

ORLANDO, Fla.--Sprint (NYSE: S) may be in the midst of aggressively expanding its wireless network with plans to potentially deploy 20,000 cell sites and repurposing existing sites, but all of those efforts will require a robust backhaul network that today in some markets is often limited to just a few wireline operators.

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Draper

Speaking during the Tuesday afternoon keynote session at the Comptel trade show, Dow Draper, president of wholesale and prepaid for Sprint, said that having various wireline backhaul sources is an important part of meeting its wireless network expansion goals.

"Backhaul is just as important as a cell site since the cell site is just the last mile," Draper said. "The ability to get access to fiber through multiple sources to get a fair prices is our big concern."

Draper added that Sprint would "like to work together with wireline providers to have a competitive landscape across all of that [in order to] increase the level of competition and increase the level of investment."

Finding a choice of backhaul providers has been a continual challenge for Sprint in most of the markets where it offers wireless service. In 80 percent of its markets, it has only one incumbent telco provider to get wireless backhaul services.

"For a large portion of our cell sites, we do not have much choice, so you can imagine how those negotiations go," Draper said. "It really does matter and the cost of backhaul can be upwards of 30 percent to operate a cell site so it's not immaterial to be able to provide innovative and lower cost services."

By having a more competitive market to get special access services for wireless backhaul, Dow said it will be able to take more chances on driving new wireless service innovations like its growing Internet of Things (IoT) business segment.

"When we talk about the access costs, that can be a huge part of the overall cost to run a network so having a competitive cost structure in all markets allows you to take more risks and build more of your last mile network, which is the cell sites," Draper said. "That's the fundamental reason why we need to work together."

Being one of the key purchasers of special access circuits for backhaul, Sprint overall has been one of the major advocates of special access reform.

According to statistics collected by a number of competitive providers, ILECs like AT&T (NYSE: T) and Verizon (NYSE: VZ) collectively own about 80 percent of the special access market.  

In 2013, Sprint joined a coalition of competitive service providers protesting AT&T's proposal to stop offering extended contracts on services such as T1 and DS-3 circuits and the discounts that were included in those contracts.

Joined by Level 3 and others, Sprint jointly wrote a letter to the FCC claiming that AT&T's action was an abuse of their standing in the special market segment. 

At this point, the next chapter of the special access market will be written by the FCC.

The regulator recently extended the deadline for incumbent telcos and their wholesale CLEC customers to file comments in response to its Special Access final notice of proposed rulemaking (FNPRM) in the special access rulemaking proceeding.

Related articles:
Sprint's Claure: Wireline assets are strategic for competing in wireless
Sprint's new CEO open to selling wireline business
Sprint's wireline revenues drop to $746M on lower voice, data, Internet results
Sprint to expand and improve LTE network, may add up to 20,000 cell sites

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