Featured Story
Samsung Networks is having a miserable year
Sales numbers are falling at a steeper rate for Samsung's network business than they are for Ericsson and Nokia.
Announces three-year growth and cost-reduction goals as it realigns to target two distinct market segments: businesses and consumers
September 17, 2003
OVERLAND PARK, Kan. -- Sprint (NYSE: FON, PCS) today announced its three-year growth and cost-reduction goals as the company transforms into an operation focused on the needs of two distinct market segments – businesses and consumers.
On Sept. 10, Sprint announced that the company will align its resources based on customer needs and preferences, enabling Sprint to more effectively and efficiently use its portfolio of assets to create communications solutions.
Currently, Sprint is organized according to asset group and products – local telecommunications, global wireline voice and data services and wireless.
“The revenue goal of the transformation effort is to grow faster than the competition,” said Gary D. Forsee, Sprint chairman and chief executive officer. Forsee added that growth can be achieved by:
Capturing a greater share of Sprint customers’ spending on communications services by combining Sprint products and services into new offerings that leverage the company’s national wireless, long-distance and Internet networks and its local operation.
Leveraging and expanding Sprint’s nationwide distribution channels – owned and leased retail space, marketing partnerships and alliances – to sell the company’s complete portfolio of wireless and wireline products.
Improving sales productivity that is expected to result from a unified Sprint sales team focused on business customers.
Gaining access to a previously untapped consumer market as a result of Sprint’s recently announced “national local” strategy. Through local resale, Sprint has effectively expanded its local presence from 5 percent to over 80 percent of the U.S. population.
“Acquiring new customers and selling into our current base are equally key to our growth goals. One of Sprint’s chief advantages is our customer base of over 26 million unique users. Increasing penetration of our products and services into that existing base by even 1 or 2 percent can equate to hundreds of millions of dollars in new revenue,” Forsee said.
“The transformation to an operation with an increased focus on serving businesses and consumers accelerates our ability to capitalize on the cross-selling, bundling and integration demands of our customers. It also enables Sprint to improve and expand its customer service efforts, focused specifically on the unique demands of business and consumer customers.”
On the cost side of the equation, the company’ goal is to reduce total operating expenses by 5 to 7 percent over the next three years, or more than $1 billion in annual savings. The company’s transformation efforts are being designed to improve Sprint’s productivity through:
Consolidating systems and eliminating redundancies
Automation
Process re-engineering
E-enablement
Organizational redesign and streamlining
“From a recently completed benchmarking initiative, we are clear on where the cost and efficiency opportunities reside across the enterprise. We are putting a high priority on simplifying our business processes,” Forsee said.
“The entire leadership team at Sprint is fully engaged in the company’s transformation and is focused on achieving the growth and cost-reduction goals we’ve outlined here. Additionally, we are aligning our capital expenditures with this customer-focused effort.”
This focus on growth and cost is expected to extend Sprint’s already strong progress on debt reduction.
Over the last two quarters, Sprint has reduced its net debt by more than $3.5 billion, representing more than 50 percent of the company’s two-year $7 billion net debt reduction goal.
Forsee added, “Ultimately, the transformation represents a fundamental shift for Sprint that I expect will move us forward to a new level of performance.”
Sprint expects to advise the investment community on how these goals translate into 2004 forecasts at its December Investment Community Meeting.
Forsee said,“While we have no timetable for recombining our tracking stocks, we continue to believe, as we said at our annual shareholders meeting, that a recombination of the stocks is likely at some point. As always, we clearly remain committed to doing what is in the best economic and operational interest of all of our shareholders.”
Sprint Corp.
You May Also Like