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Sprint Unveils Community Lab to Boost OpenRAN 5G NR Project

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Sprint Corporation (S - Free Report) has unveiled a Telecom Infra Project (TIP) Community Lab in a bid to further develop OpenRAN 5G New Radio (NR) solutions. Launched in 2016, TIP is a collaborative telecom community formed to provide enhanced connectivity services to underserved markets through the development of software-based telecom infrastructure.

Located at the company’s headquarters, the lab is one of 12 TIP Community Labs worldwide. It will host the trial and test activities of the TIP OpenRAN 5G NR Project Group. The project is aimed at accelerating the innovation for 2.5 GHz 5G NR to deliver better connectivity and services to customers. Sprint, being the first U.S. wireless operator to become a member of the initiative, mainly focuses on developing sub-6 GHz 5G NR small and macro cells for outdoor and indoor use cases, followed by millimeter wave 5G NR solutions.

The pace of development, innovation and testing gives OpenRAN 5G NR an edge over traditional models. However, the technological shift carries with itself a number of challenges like intellectual property rights issues and compatibility with legacy equipment. This can eventually make troubleshooting and technical operations more complicated for operators, as multiple vendors are involved in the network.

Co-chaired by Sprint, the lab will be used to test open 5G RAN prototype in early 2020 to develop modeling techniques and a test framework for specific applications. The project group aims to create open reference design, leveraging high-quality hardware components coupled with disaggregated software for a flexible and modular 5G NR platform, thereby reducing costs for operators. This high-end technology will also aid in introducing new features in the market faster, allowing operators to work with smaller players.

In addition, Sprint is focused on growing revenue per customer account by selling additional devices and value-added services, including promotion of its feature-rich Unlimited Plus and Unlimited Premium rate plans. The company continues to leverage digital capabilities to transform the way it engages with customers. Sprint’s strategy of balancing growth and profitability while increasing network investments and adding digital capabilities is likely to drive its financial performance in the coming quarters.

In addition, Sprint’s all-stock merger with T-Mobile US, Inc. (TMUS - Free Report) is expected to lead to about 127 million customer addition. The company will have a strong closing balance sheet and a fully funded business plan with a strong foundation of secured investment grade debt at close. The new entity will likely have the network capacity to rapidly create a nationwide 5G network.

It has long-term earnings growth expectation of 19.6%. The stock has rallied 4.2% compared with the industry’s growth of 18.8% year to date.

Sprint currently has a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the industry are Verizon Communications Inc. (VZ - Free Report) and Gogo Inc. (GOGO - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Verizon surpassed estimates in each of the trailing four quarters, the average positive earnings surprise being 2.2%.

Gogo outpaced estimates in each of the trailing four quarters, the average positive earnings surprise being 39.1%.

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