Masayoshi Son, SoftBank founder and CEO, warned that it may take as long as two years to revive the fortunes of Sprint following the Japanese company’s acquisition of the struggling US number-three operator, reports Reuters.
Speaking at an event in Tokyo, Son said Sprint, which significantly trails Verizon Wireless and AT&T in the US, must win customers from its rivals. However, he warned that big improvements in subscriber growth are unlikely in the short term.
SoftBank completed the acquisition of a 78 per cent stake in Sprint in July for $21.6 billion. It subsequently increased its stake to 80 per cent.
Son has a track record in turning struggling mobile businesses around, having made Vodafone’s Japanese business a success after it was acquired by SoftBank in 2006. He noted that it took a year for the former Vodafone business to become the market leader in terms of net subscriber growth.
The SoftBank chief also stressed that it takes time to prepare services and networks and get devices ready for a big push, and that for “anything substantial you need one or two years”.
Sprint has been losing subscribers and the company’s share price has continued to fall, despite SoftBank’s arrival as the controlling shareholder. The company reported an increased loss of $1.6 billion for the second quarter of 2013, with a slight year-on-year increase in revenue.
Sprint’s efforts to win new subscribers include the recent introduction of the option for customers to upgrade their smartphone every 12 months, and plans that give customers unlimited talk, text and high speed data while on the Sprint network. Rivals Verizon Wireless, AT&T and T-Mobile offer similar packages.
Jonathan Chaplin, an analyst with New Street Research, said in a note on 22 September that he anticipates Sprint losing 1.2 million subscribers in 2014, despite previously forecasting a 100,000 gain.
Chapin said conversations with Sprint management suggest the company’s network revamp will take longer than expected and include significant additional expenses. The operator is looking to cover 200 million people with its LTE network by the end of the year.
There is also concern related to Sprint’s acquisition of wholesale operator Clearwire in July, which included a large quantity of spectrum. Although the additional spectrum provides the option of increasing network capacity, investors believe it could take a huge amount of investment to do so.