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Sprint Focuses On Cutting Costs And Growing Organically As New CEO Makes Moves
- Offers new cheap plans for family and individuals.
- The company offers the best deal for its iPhone 6 subscribers.
- Network improvements remain core focus for company.
Sprint Takes The Right Approach To Survive Tough Competition Across Its Industry
- The company has opted for competitive pricing to address competition.
- Recent deals will help strengthen its subscriber base, but will likely adversely affect top-line and ARPU growth.
- The company needs to ramp up network upgradation efforts across covered markets to enhance customer experience.
Sprint: Claure Off To A Good Start, But The Road To Recovery Is Long And Uncertain
- Incoming CEO Claure made a great impression in his first month on the job.
- Investors like the unlimited iPhone deal, in an attempt to aggressively grow the customer base.
- The smaller scale and leverage remain key disadvantages in an industry that's very competitive.
Update: Investors Too Impressed With New Sprint CEO At Communacopia Conference
- Sprint's new CEO Marcelo Claure impresses the market at investor conference.
- Investors should continue avoiding the stock and use the recent gains to exit positions.
- Recent stock gains aside, the disruptive pricing was anticipated and will eventually hit the stock when quarterly losses mount from a pricing war.
Should Subscribers Rethink Switching From Sprint To A Competitor?
- Company will change dynamics of industry despite being late entrant in price war.
- It is important for S to continue investments in network.
- Needs to utilize its largest spectrum in industry to improve its network experience.
- After long deliberation, Sprint has decided not to pursue the T-Mobile acquisition anticipating a lengthy regulatory review.
- Sprint lost about 3.5 million postpaid customers over the last 24 months. In the last six quarters, it lost 2.8 million postpaid customers.
- RootMetrics wireless network quality ranking for the first half of 2014 shows Sprint has fallen behind T-Mobile and now is in the fourth place among the national wireless carriers.
- Sprint recently announced new pricing plan for families, new pricing for other categories are expected to follow.
- Sprint is planning to offer low price plans and lower cost smartphones while featuring larger data allotments.
- The move seems to me like a Hail Mary pass, designed to help the struggling company retain subscribers and compete against larger rivals.
- I predicted that Sprint would have to do something to retain subscribers or risk being acquired by a larger company, but I thought the company would acquire smaller carriers.
- Trying to compete on cost against larger companies is a risky move. It could leave Sprint with smaller margins, less profit, and more vulnerable than ever to takeover.
- Sprint ending the pursuit of the T-Mobile merger crushed the stock.
- Management suggests disruptive pricing to hit markets next week.
- Lack of consistent profits and a high debt load question the suggested pricing plans.
Sprint's Immediate Struggles Could Make Way For Positive Long-Term Prospects
- S has been experiencing gradual improvement in operating metrics through strategic initiatives.
- Competitive pricing policies have been helping moderate postpaid subscriber losses.
- Competitive activities in the industry could pressure the company's bottom line results short term.
- Postpaid customers are leaving.
- Prepaid customers are leaving.
- Debt is rising even without the rumored T-Mobile buyout.
- Sprint shares are trading sharply lower on news that the company has dropped its bid for T-Mobile.
- Sprint shares are now down sharply from my previous short recommendation which was based in part on skepticism towards the T-Mobile deal.
- Traders who have been short Sprint should look to lock in profits.
- Sprint is said to withdraw its T-Mobile US bid due to regulatory hurdles.
- We believed that Sprint could overcome these regulatory issues and are highly disappointed with the outcome.
- We do not identify any short-term plan B for Sprint: SoftBank is unlikely to sell to DISH and the turnaround effort will take time with likely short-term earnings downwards revisions.
- We cut our positive rating on the stock.
Sprint Takes Steps Toward Neutralizing 'Net Neutrality'
- Sprint provides wireless service. Is that telecommunications or information service?
- If Sprint is classified as information service, the FCC will have no teeth.
- If Sprint is classified as telecommunications, the FCC could choose to push for Net Neutrality.
Iliad's Acquisition Of T-Mobile Could Leave Sprint Up For Grabs
- If Iliad can acquire T-Mobile, Sprint will be left with few options.
- Sprint’s subscriber base is shrinking and its share price is falling.
- The declines could leave Sprint vulnerable to acquisition.
Fri, Sep. 12, 10:14 AM
- Apple's (AAPL +0.1%) iPhone 6 Plus is now on backorder and not available to ship for 3-4 weeks in the U.S., judging by Apple.com shipment quotes after the device went on sale after midnight.
- The iPhone 6 Plus, the larger of the two iPhone 6 models offered, is showing a shipment time of 3-4 weeks rather than delivery on the first day of sale, Sept. 19th, for the iPhone 6.
- Also, BGR reports that iPhone 6 Plus units through AT&T (T -0.4%) will now ship in 21-28 business days, Verizon's (VZ -0.6%) models are backordered until Oct. 7 (for 64 GB) or Oct. 14 (16 GB and 128 GB), and Sprint (S +7.3%) says all of its shipments are currently delayed.
- Worldwide demand also is said to be high for the Plus, with customers in France and the U.K. saying the larger iPhone has sold out.
- AAPL is expected to announce next weekend the total initial sales results for the first three days of availability.
Fri, Sep. 12, 9:12 AM
Fri, Sep. 12, 7:46 AM
- Impressed with management changes at Sprint (NYSE:S) and seeing the stock as a long-term investment opportunity, Cowen upgrades to Outperform with $8 price target.
- In other news, Sprint plans to offer the new iPhones beginning on Sept. 19 and announces the iPhone for Life Plan, allowing customers to get a new iPhone for $20 per month for 24 months and the guarantee of a new device every two years.
- Shares +2.4% premarket after yesterday's 6.8% gain.
- Previously: Sprint on the move as Claure addresses conference
Thu, Sep. 11, 11:44 AM
- "We're implementing a culture of must-have and nice-to-have," new Sprint (S +5%) CEO Marcello Claure tells the audience (webcast) at the Goldman Communacopia Conference. "We have to focus on must-have and nice-to-have will have to go."
- Everything is on the table, he says, and "some [managers] will make it and some won't."
- The advice he got upon becoming CEO of a public company for the first time was not to change anything for the first 100 days, "but I just couldn't help myself," and Sprint overhauled its offerings on day 4.
- Previously: Claure: Sprint to slash prices, cut more jobs
Tue, Sep. 2, 6:40 AM
- SoftBank (OTCPK:SFTBY) says it will begin selling a humanoid robot named "Pepper", which is equipped with a laser sensor and 12 hours of battery life, at Sprint (NYSE:S) stores in the U.S. by next summer.
- The robot was originally targeted at families and the elderly before getting attention for business use since being unveiled in June.
- SoftBank has developed Pepper with an open platform operating system, allowing customization for use in construction, health care and entertainment industries.
Thu, Aug. 21, 1:31 PM
- Three days after launching new shared data plans (along with big short-term promotions), Sprint (S +1%) has rolled out a $60/month individual plan that provides unlimited data to go with unlimited voice/text. Like the shared data plans, Sprint's offering requires users to forgo smartphone subsidies.
- Sprint notes the individual plan is $20/month cheaper than a comparable T-Mobile (TMUS -1.1%) unlimited plan. For $60/month, T-Mobile offers individuals 3GB of data to go with unlimited voice/text. AT&T and Verizon don't offer unlimited data.
- Meanwhile, in a PR titled "T-Mobile Urges Its Customers to Rescue Sprint Customers," T-Mobile states it will give both a new customer and an existing customer unlimited data for a year, when the latter gets the former to sign up. Those already on unlimited plans will get $10/month in credit for 12 months.
- Sprint lost 181K core platform postpaid subs in Q2, while T-Mobile (aided by aggressive pricing and promotions) posted 908K branded postpaid net adds. Sprint shares are down 23% since reports emerged on Aug. 5 the carrier is abandoning its efforts to acquire T-Mobile.
Mon, Aug. 18, 7:19 PM
- After recently promising big price cuts, Sprint (NYSE:S) has launched Family Share Packs, a pricing scheme that bears a strong resemblance to AT&T and Verizon's subsidy-free shared data plans. Unlike regular Framily plans, there's no drop in per-line charges upon adding new members.
- Sprint argues its pricing sharply undercuts rivals. For example, a family sharing 20GB between four lines would pay $160/month, less than the $210/month charged by AT&T and Verizon for similar plans, and the $180/month charged by T-Mobile (NYSE:TMUS) for a plan featuring 5GB/line for four lines.
- However, Sprint fails to undercut T-Mobile among families requiring less data. With Sprint charging an extra $10/month per line to those buying a bucket smaller than 20GB, an 8GB bucket costs $170/month to a family of four, and a 4GB bucket $140/month. By contrast, a $140/month T-Mobile plan provides 12GB (3GB/line) to a family of four.
- At the same time, Sprint is following T-Mobile's lead in offering aggressive short-term promotions: Until the end of September, the carrier is waiving $15/month access line charges through 2015 for families buying plans with 20GB or larger buckets, and is also throwing in an extra 2GB/line.
Thu, Aug. 14, 6:45 PM
- With a T-Mobile deal off the table, new Sprint (S -1.9%) CEO Marcelo Claure has told employees the carrier will introduce "very disruptive" prices next week. SoftBank's Masayoshi Son suggested last week price cuts were on tap.
- Claure: "We're going to change our plans to make sure they are simple and attractive and make sure every customer in America thinks twice about signing up to a competitor ... When your network is behind, unfortunately you have to compete on value and price."
- The ex-Brightstar CEO admitted (among other things) Sprint's 4G buildout took too long, that social media chatter about the company is mostly negative, and that Sprint didn't react quickly enough to moves from rivals (read: T-Mobile).
- He promises to use Sprint's huge spectrum assets (skewed towards higher frequency bands) to improve network quality, and to have the industry's lowest cost structure. Claure admits the latter will result in new job cuts, but says he isn't sure of their scope.
Fri, Aug. 8, 11:10 AM
- "Price competition will intensify ... Sprint (S -4.4%) will soon be ready to join the fray," says SoftBank's (OTCPK:SFTBF) Masayoshi Son following the end of Sprint's bid to acquire T-Mobile.
- Son notes SoftBank used aggressive pricing and marketing to gain Japanese mobile share following the acquisition of Vodafone's struggling Japanese unit - "We had nothing we could be proud of ... But we were still able to win more net users than anyone else." - and mentions Sprint is testing new service plans (previous).
- T-Mobile, of course, is already quite aggressive with its pricing, and AT&T had made sizable price cuts of its own in response. Verizon is refusing to return fire for now.
- Sprint is now down 23% since reports emerged it's giving up on trying to buy T-Mobile for the time being.
Wed, Aug. 6, 12:45 PM
Wed, Aug. 6, 9:22 AM
- Sprint (NYSE:S) has confirmed reports CEO Dan Hesse is leaving, and will be replaced by Marcelo Claure, founder/CEO of of mobile hardware distributor Brighstar.
- Claure, 43, is already a member of Sprint's board. He'll be resigning from Brighstar, and SoftBank (OTCPK:SFTBF) will acquire his remaining interest in the company. Bloomberg states Hesse may receive a $40M+ severance package.
- Shares are off sharply premarket due to widespread reports Sprint is ending its bid (for now) to acquire T-Mobile on account of regulatory opposition, as investors fear the carrier will continue bleeding share to T-Mobile, Verizon, and AT&T as an independent entity.
- More on Sprint/T-Mobile
Wed, Aug. 6, 9:14 AM
Tue, Aug. 5, 7:14 PM
- Bloomberg joins the WSJ in reporting Sprint (NYSE:S) is abandoning its T-Mobile USA bid. The news service adds Sprint plans to name a new CEO as soon as tomorrow.
- Dan Hesse has been Sprint's CEO since 2007. But with a T-Mobile deal apparently off the table and Sprint continuing to lose share to rivals, SoftBank's (OTCPK:SFTBF) Masayoshi Son may feel new leadership is needed.
- S -4.5% AH
- Update: Re/code reports Marcelo Claure, founder of mobile hardware distributor Brightstar, will be named Sprint's CEO. Shares finished AH trading down 15.1% on the T-Mobile news.
Tue, Aug. 5, 6:58 PM
- The WSJ reports Sprint (NYSE:S) is abandoning its bid to acquire T-Mobile USA (NYSE:TMUS) due to excessive regulatory hurdles.
- There were already many doubts about the ability of a Sprint/T-Mobile deal to pass muster with regulators.
- If Sprint is out of the picture, the coast is clear for Iliad (OTC:ILIAF) to pursue T-Mobile, provided financing isn't an issue. There were multiple reports earlier today indicating T-Mobile is rejecting Iliad's initial $33/share offer for a 56.6% stake.
- TMUS -5.6% AH
- Related tickers: OTCQX:DTEGY, OTCPK:SFTBF
Tue, Aug. 5, 3:59 PM
- The WSJ reports T-Mobile USA (TMUS +0.8%) has rejected Iliad's (OTC:ILIAF) request for access to its books, and won't change its mind in the absence of a better bid. The FT reports a formal rejection of Iliad's $33/share offer for a 56.6% stake in T-Mobile could arrive tomorrow.
- As it is, Deutsche Telekom (OTCQX:DTEGY) was reported to have liked Sprint's (S -1.4%) offer better. Sprint and parent SoftBank (OTCPK:SFTBF) are rumored to be offering ~$40/share, but their bid also carries much more regulatory risk.
- Reuters reports Iliad is talking with investors for help in sweetening its offer. Sources state the carrier has engaged pay-TV providers Dish , Cox, and Charter, as well as infrastructure, pension, and sovereign wealth funds.
- The news service adds DT is (not surprisingly) skeptical about Iliad's claim a merger between a French carrier and a U.S. carrier will yield $10B in synergies.
Fri, Aug. 1, 4:20 PM
- "If two of the largest companies are able to bid as one combined entity in the auction, their combined resources may have the effect of suppressing meaningful competition," says the FCC in a blog post. The post outlines a proposal by chairman Tom Wheeler that bars carriers from jointly bidding in next year's huge low-frequency spectrum auctions.
- The WSJ reported two weeks ago Sprint (S +1.4%) and T-Mobile (TMUS +1.4%), each of whom have a dearth of low-frequency spectrum relative to AT&T and Verizon, plan to form a JV that would raise $10B to jointly bid in the auction. The funds would be obtained through a $45B financing package SoftBank is lining up for a Sprint/T-Mobile merger.
- "It’s certainly a hint that they are predisposed against a merger," says analyst Craig Moffett about the FCC's stance. Prospective T-Mobile acquirer Iliad (OTC:ILIAF) must be pleased.
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