S SentinelOne Inc

By Ryan Knutson 

Don Budreski earlier this year noticed a roughly three-story-tall utility pole pop up across the street from his Baltimore electronics shop.

"It was just odd," he said of the slender, steel post. "I thought, 'What are they putting that thing there for?' "

Mr. Budreski had caught a glimpse of a key element of Sprint Corp.'s plan to improve its network and win back customers: thousands of sidewalk utility poles.

The Overland Park, Kan., company wants to install low-power cellular antennas in public rights of way, land typically holding utility poles, street lamps and fire hydrants. In places where it can't strap antennas to existing poles, it wants to erect new poles.

Sprint is primarily working with Mobilitie LLC, a Newport Beach, Calif., company to build these cellular antenna systems from California to Massachusetts. Mobilitie has begun installing them, which it says are typically the size of a briefcase and often inside boxes attached to the poles.

But the rollout has been delayed as communities confront what some consider unsightly installations and authorities wrestle with new regulatory questions. Sprint recently slashed its capital spending plans for the year as it waits for zoning approvals. Mobilitie says it has about 1,000 permits approved and will start large-scale installations once more are in hand.

In the past, wireless carriers built towers of 200 feet or more that could send signals over large areas to cover as many customers as possible. Now that more people use smartphones to stream videos and surf the Web, carriers want to put lower-power antennas closer to the ground so that fewer people will connect to each one -- resulting in less network congestion.

"It's not a new concept," said John Saw, Sprint's chief technology officer. "All carriers are trying to 'densify' their networks." But Sprint's goal is to be "cheaper and faster and more innovative" than its rivals, he said.

Popping antennas on existing utility poles is something most carriers are hoping to do. But cash-strapped Sprint aims to take the concept further than rivals: It is hoping to install as many as 70,000 antennas in the public right of way over the next few years. By comparison, it has 40,000 traditional antenna sites on towers or rooftops.

It is a central piece of a strategy devised in early 2015 by Sprint Chairman Masayoshi Son to improve service while keeping costs down. Companies can negotiate with a city for one deal that includes various permits. Mobilitie's Mr. Jabara says building and operating these so-called small cells costs about $190,000 over 10 years, whereas a traditional tower costs $732,000 because of real estate rents, power and other costs.

The airwaves Sprint owns are ideally suited for this design because their high frequency prevents them from traveling long distances. Rather than string fiber-optic cables to each antenna, Sprint hopes to link them via wireless connections, further bringing down costs and speeding deployment.

Analyst Jonathan Atkin at RBC Capital Markets is skeptical, saying Sprint may only be able to build a fraction of the sites it wants in public rights-of-way governed by federal, state and local laws.

Mobilitie's practices in some places have faced local resistance. It has filed applications under various corporate names, including the Illinois Utility Pole Authority, NC Technology Relay Networking, and Interstate Transport and Broadband. It has used similar-sounding names in at least 30 states.

Joseph Van Eaton, a lawyer who represents municipalities dealing with the applications, says the names are misleading. "You may very well end up with some of these applications being granted for exactly the reason why they like these names -- it sounds official," he said.

Mobilitie is willing to modify its applications to avoid being disruptive, says Chief Executive Gary Jabara. "It's more important to be a good citizen" than to move quickly, he said. "You have to do the right thing."

Mr. Jabara says the names also make it easier for local officials to understand the status of his firm. The company is a registered utility and those business names helps reflect that status, he says. "In some states it's more comprehensible for a jurisdiction to work with an authority," he said. In the future, the company will most often use the name "Mobilitie" in dealings with local officials, he said.

In Salem, Mass., Mobilitie applied last fall to install antennas on seven poles. After some residents expressed concerns over the look of the antennas, the company withdrew three applications and agreed to camouflage the other four.

In Baltimore, Mobilitie was fined $5,000 for failing to get proper permits for the temporary pole across from Mr. Budreski's shop, which was taken down after a few days. The company since has received approval to attach equipment to 14 poles across the city. It will pay Baltimore $70,000 for pole attachment rights in the first year of the deal. Mr. Jabara says that amount is unusually high, and many places charge less than $50 a year per pole.

Mr. Jabara says such incidents were inadvertent mistakes. Sprint's Mr. Saw says his company is committed to being patient and making sure municipalities are comfortable with its plans.

"We're not surprised that sometimes you will run into opposition in certain jurisdictions," Mr. Saw says. " 'Not in my backyard' has been around for a very long time."

Write to Ryan Knutson at ryan.knutson@wsj.com

(END) Dow Jones Newswires

June 07, 2016 18:18 ET (22:18 GMT)

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