Sprint to Take $2B Shave

Dan Jones
News Analysis
Dan Jones, Mobile Editor
11/4/2015



Sprint employees now know for sure that more cuts are coming: The question is, when, how many, and where from?

Sprint Corp. (NYSE: S)'s CEO, Marcelo Claure, and its new CFO, Tarek Robbiati, were both questioned heavily about the operator's plans to shave more than $2 billion from its operating expenses in its fiscal year 2016, on the company's earnings call Tuesday. The operator's fiscal year 2016 will end in May 2017.

Both men said on Sprint's second-quarter fiscal year 2015 call Tuesday that all areas of the business are being examined for where economies can be made. "No stone will be left unturned," Claure declared on the call.

This will mean looking at overall labor costs, ways of streamlining the back office and customer care, weeding out bad external network contract deals, and more.

CFO Robbiati intimated on the call that the $2 billion-plus cost cutting may not be such a tall order. "That only represents 10% of the cost base we currently have," he said.

The executives said that getting costs under control is the second stage of righting the good ship Sprint now that they feel that the top line is under control.

Sprint reported $8 billion in revenue for its fiscal quarter 2015, down 6%, with an operating loss of $585 million. The company did manage to add 1.1 million wireless customers for the quarter.

Capex spending on its network is flat year-on-year. Claure, however, made it clear that unlocking as much capacity and speed from the network as possible is crucial for Sprint. The operator has now launched carrier aggregation -- bonding radio channels for more speed and capacity -- in 80 markets.


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The CEO says that download speeds of up to 120 Mbit/s have been recorded on iPhone 6s in cities with the carrier aggregation enabled.

— Dan Jones, Mobile Editor, Light Reading

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