Sprint warns of dire straits without merger - Mobile World Live

Sprint warns of dire straits without merger

08 MAY 2019

Sprint executives warned the operator may have to narrow its coverage area to stay afloat if a proposed merger with T-Mobile US is not approved, as it posted a steep loss in the three months to end-March.

On a call with analysts, CEO Michel Combes (pictured) said Sprint would lack the low-band spectrum, scale and financial resources to effectively compete with larger rivals AT&T and Verizon without the T-Mobile combination.

He added Sprint would have to “reposition the company in how we play and which battlefield will be ours”, reducing promotional activity and narrowing its geographic focus, ultimately becoming less of a nationwide competitor.

Sprint expressed similar sentiments in filings with the US Federal Communications Commission in September 2018.

Combes’ renewed emphasis on Sprint’s struggles came as the operator posted a net loss of nearly $2.2 billion for its fiscal Q4, primarily due to a $2 billion non-cash goodwill impairment charge. In the comparable period of 2018, it recorded a profit of $69 million.

Revenue increased year-on-year from $8.1 billion to $8.4 billion in the recent quarter.

Stiff competition
Sprint lost 189,000 lucrative post-paid phone subscribers during the period, compared with the addition of 55,000 in the 2018 quarter.

Combes attributed the decline to increased competition from AT&T and Verizon, noting the pair launched “very aggressive device promotions with much less restrictions than in the past”.

The company is also feeling pressure from cable players Comcast and Charter Communications, which recently entered the wireless space via MNVO agreements with Verizon.

Sprint is pressing on with plans to launch mobile 5G service in the coming weeks, staring with Chicago, Atlanta, Dallas and Kansas City, Combes said. Deployments in additional cities are planned by end-June.

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Diana Goovaerts

Diana joins Mobile World Live as its new US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana comes to GSMA from her former role as Editor of Wireless Week and...

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