Sprint isn’t merging with T-Mobile, but the company did end the weekend announcing an agreement to license out its network to one of the nation’s largest cable companies. Altice USA, which was known as Cablevision until 2015, will be entering the wireless industry.
SoftBank, the carrier’s parent company, plans to seek additional strategic partnerships like this one. While Altice will be able to become a mobile virtual network operator (MVNO), Sprint gains access to an existing broadband platform. Sprint will leverage that to fill in gaps in its network and increase densification.
— MarceloClaure (@marceloclaure) November 5, 2017
Altice, meanwhile, joins a small-yet-growing number of cable companies diving into wireless with services based on existing networks. Comcast introduced Xfinity Mobile earlier this year, which has turned out to be a profitable operation early on. Charter is expected to introduce its own package with talk, text, and data in 2018.
Rather than spending billions of dollars to build their own networks, these cable companies are opting to pay fees to traditional carriers. The fees they pay for data on existing networks can be passed off to customers with huge margins.
The agreement between Sprint and Altice comes just one day after SoftBank officially ended negotiations with Deutsche Telekom. SoftBank had been working with T-Mobile parent’s company to merge Sprint with the magenta-loving brand. It’s believed that SoftBank wanted to own an equal stake in the new company but Deutsche Telekom wasn’t willing to relinquish control. Neither side was willing to budge, so they formally announced T-Mobile and Sprint would not be merging.
Unfortunately, this doesn’t solve Sprint’s problems. The carrier isn’t doing anything to cut into the lead of Verizon, AT&T, and T-Mobile. Its network is way behind, and SoftBank does very little to improve the situation. Filling in some gaps with Altice’s broadband platform helps a bit, but Sprint doesn’t appear ready for the future.