Sprint Getting Ready for 5G, Waiting for T-Mobile Decision
Sprint, which argued for its takeover by T-Mobile based on concerns it will falter on its own, reported higher than expected revenue Thursday, but analysts said other numbers raised questions for the company. “We delivered solid financials, increased network investments…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
as we prepare for our mobile 5G launch, and continued the digital transformation of the company,” said Sprint CEO Michel Combes. Sprint is poised to deploy regardless of whether the deal is approved, Combes said, but called the combination “the only path to delivering the breadth and depth of spectrum which will allow us to provide a truly consistent nationwide 5G experience to Americans.” Sprint upgraded thousands of macro sites to add LTE on 800 MHz, 1.9 GHz and 2.5 GHz, Combes said on a call with analysts. Sprint has installed 2.5 GHz on “roughly” 75 percent of macro sites, up from about 50 percent a year ago, he said. It “added 800 MHz to thousands of sites, primarily in the southwest market,” he said. It has 27,000 small cells on air, compared with 3,000 a year ago, he said. Sprint reported a net loss of $141 million on revenue of $8.4 billion. It had 309,000 net wireless adds but lost 26,000 postpaid and 40,000 prepaid phone customers. “Sprint’s strategy of balancing growth and profitability while we work toward regulatory approval of our T-Mobile merger is reflected” in the results, Combes said. Postpaid and prepaid subscriber losses were “a result of the company moving away from more aggressive pricing promotions, such as the company’s previous Cut Your Bill in Half promotion,” said Technology Business Research: The move to more conservative pricing “helps Sprint to improve” average revenue per unit but is “diminishing subscriber growth as Sprint’s reputation as the pricing leader in the U.S. wireless industry is its strongest differentiator against rivals.” While results "showed continued signs of stabilization for the business, we think Sprint will need more time before their standalone business can support the current valuation of the stock,” said New Street analyst Jonathan Chaplin. “To be constructive on the stand-alone business, we would need to see the benefits of their network investment driving better subscriber trends.” Craig Moffett of MoffettNathanson continues to predict T-Mobile/Sprint has a 50/50 shot at approval. “DOJ Antitrust [Division] chief Makan Delrahim was presumed to be the ultimate decision-maker for the Sprint/T-Mobile deal,” Moffett wrote investors. “But he and Attorney General nominee William Barr are seen, at best, to be adversaries, and, at worst, open enemies. Barr’s advocacy for AT&T/Time Warner put him at odds with Delrahim. Will Delrahim stay if Barr is confirmed?”