Sprint swung to a loss in its fiscal Q3 (calendar Q4 2018), despite an ongoing effort to cut costs and boost growth.
Revenue was up 4.4 per cent year-on-year to $8.6 billion, with an $8.4 billion contribution from wireless, but Sprint still came away from the quarter with a net loss of $141 million. That marked a sharp drop from a profit of $7.2 billion the year prior, which included a one-time benefit of $7.1 billion from changes to the US tax code.
The loss came even as Sprint reported it cut costs by $300 million over the past three quarters and is on track to deliver more than $1 billion in gross cuts for the full year.
In a statement, CEO Michel Combes said the metrics reflect “Sprint’s strategy of balancing growth and profitability while we work toward regulatory approval of our T-Mobile merger”.
He added on a call with journalists regulatory approval of the deal is not expected to be significantly delayed despite a recent shutdown of the US government.
But the operator isn’t sitting idle while it waits for the green light: it more than doubled its network capex from $696 million in fiscal Q3 2017 to $1.4 billion in the recent quarter, dramatically boosting investments as it prepares to launch 5G in the first half of 2019.
CTO John Saw said the operator is deploying hundreds of massive MIMO radios in Sprint’s nine 5G launch cities, but added the equipment, which will carry both 4G and 5G traffic, is also being rolled out elsewhere.
Saw also noted Sprint has deployed 2.5GHz spectrum on 75 per cent of its macro sites and will be “substantially done” with the rollout in another quarter. LTE-Advanced upgrades will be completed in a similar timeframe, he added.
Small cell deployments also picked up in the quarter, with 27,000 deployed at the end of December 2018, up from 21,000 at end-September.