Boston, MA 09/02/2014 (wallstreetpr) – Telecommunications service provider Sprint Corporation (NYSE:S) is on an expansion spree of its roaming program by striking agreements with rural-based cellphone companies to extend its footprint.
Footprint Expansion
The company had to look for alternative avenues to expand its footprint since its plans for a merger with T-Mobile US Inc (NYSE:TMUS) are in shambles. The company is also burdened with debts. Therefore, it had to scout for fresh avenues to generate revenues without resorting to heavy capital expenditures.
As such, striking out deals with the rural-based cellphone companies provide Sprint Corporation (NYSE:S) a cost-effective route to expand its footprint. By doing this, the company would also be in a position to explore the possibility of reducing its debt periodically.
It all started with the company Chairman, Masayoshi Son, striking an agreement with the Competitive Carriers Association or the CCA in March paving the way for a number of regional and rural carriers in the U.S. to make use of each other’s networking facility, Reuters reported. This had enabled them to offer roaming facilities at a mutually agreed attractive price.
Deals With Small Carriers
As a result of a deal with the CCA, Sprint Corporation (NYSE:S) was able to reach an agreement with a dozen small carriers in June providing them with population coverage of 34 million people. The agreement had also allowed Sprint to have about 352K square miles in its service territory. Sprint and T-Mobile US Inc (NYSE:TMUS) have largely focused on metropolitan areas whereas its rivals such as Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) provides nationwide coverage. Therefore, the deals are undoubtedly a boon for the telecom service provider.
Sprint Corporation (NYSE:S) and the CCA are also in the process of announcing another set of individual deals to expand roaming alliance during the industry trade show in the current month; Reuters said quoting Steve Berry, CCA President and CEO.
Management Views
The company’s new Chief Executive Officer, Marcelo Claure, disclosed that the rural carriers’ networks were extremely crucial in places where either it had no presence or planning to establish its own network.
Similarly, CCA CEO said that it was a necessity for a business relationship that provides Sprint some cost savings and at the same time stays competitive.
