Sprint grabs lifeline with rural U.S. roaming deals

Fri Aug 29, 2014 12:15pm EDT
 
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By Marina Lopes and Alina Selyukh

WASHINGTON (Reuters) - With plans for a T-Mobile US Inc merger in tatters, Sprint Corp is expanding a roaming program with rural cellphone companies that could provide a much-needed way for the debt-laden wireless carrier to cheaply increase its footprint.

In March, Sprint Chairman Masayoshi Son struck a roaming deal with the Competitive Carriers Association (CCA), which represents many U.S. rural and regional carriers, to use each other's networks for roaming at a mutually attractive price.

In June, Sprint announced that a dozen small carriers, covering a population area of 34 million people, had struck roaming deals following the outlines of the CCA agreement.

Sprint and CCA plan to announce another batch of individual agreements to expand the roaming partnerships at an industry trade show in early September, CCA President and Chief Executive Officer Steve Berry said this week.

When Son announced the mutual roaming agreement, many industry observers shrugged it off as a sweetener to soften U.S. regulators' opposition to a T-Mobile acquisition. Rural carriers have long complained about the difficulty and expense of getting the largest carriers, Verizon Communications Inc and AT&T Inc, to let customers of smaller providers onto their networks.

Deals with rural carriers could offer Sprint a lifeline to improve its national presence following the collapse of the merger with T-Mobile. So far, Sprint has already saved an estimated $1.7 billion in costs of building new towers and other infrastructure, according to a source familiar with the calculations.

Sprint's new CEO Marcelo Claure said that the networks of rural carriers "are really important in places where we haven't and don't intend to build our network."

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People walk past a Sprint store in New York December 17, 2012. REUTERS/Andrew Kelly