Speaking Friday at a financial conference, Sprint CFO Tarek Robbiati said network improvements and the ability to fully leverage the carrier’s range of spectrum assets will be key to Sprint’s future.
According to Robbiati, Sprint’s vast spectrum assets present the company with a huge opportunity that has not yet been fully tapped.
“It’s a unique advantage if exploited and so far Sprint has not exploited the full amount of spectrum it has,” he said. “…The network is an essential part of our strategy.”
Robbiati said Sprint has already made “considerable progress” in improving its network in a number of cities across the United States, thanks in part to its efforts to upgrade its cell sites to support tri-band coverage and carrier aggregation. Both of these, he said, help spread the load on the network to improve capacity and speed.
But Sprint is far from finished. Robbiati said the company is also looking to further densify its network, and is looking to use a software technology called beamforming to open up more capacity.
Despite these improvements, however, Robbiati said Sprint customers will need to have devices compatible with new technologies.
“For all of this to be truly visible, we need to have phones that are carrier aggregation capable,” Robbaiti said. “We’ve got to cycle through and as the base upgrade their phones they’ll enjoy a much better experience on Sprint.”
Improved service, Robbaiti said, combined with incentive offers – like the recent half off service promotion for AT&T, Verizon and T-Mobile customers – will help Sprint win back the 1.5 million subscribers it lost last year.
“The customers react well to (the promotion) because they want value for their money,” he said. “Phone net adds are important for us…We lost in 2014 in excess of 1.5 million customers, so we have to at least add back that number and more and we will.”
Robbiati said the utilization of spectrum assets and continuous improvement of the network will go hand in hand with the company’s previously announced $2 billion in cost cutting measures to secure Sprint’s future.
“It’s down to us,” Robbiati said. “It’s down to us to cut costs and harness the spectrum.”
On Friday, Robbiati reiterated previous statements that the cuts will come from all departments across Sprint’s business, including roaming costs to other carriers, backhaul costs, IT, marketing, general and administrative expenses, sales, service and repair and real estate.
More than just making cuts, though, Robbiati said the carrier is working to change the way it does business entirely.
“If you take the cost out without changing the way we do work, you will have cost creep coming back in,” he explained.
Going forward, Robbiati said the company will look to “put the money where it matters, where the customers are.”
One way Sprint will do this is by adopting a decentralized model to more effectively reach customers in 19 major markets across the country. The new corporate structure will include four regional offices in the Northeast, South, Central and West.
Additionally, Robbiati said Sprint is edging closer to achieving free cash flow. Yesterday, he said, Sprint closed its $1.1 billion lease-back deal with Mobile Leasing Solutions in which it sold the new lease company around 2.8 million devices. That money is now in Sprint’s accounts with “no risk” associated with it, Robbiati said, and another $100 million in deferred considerations expected down the line.
Looking forward over the next 12 months, Robbiati said Sprint is “well funded” and is “comfortable” with the level of cash it has to operate.
“So now it’s all about the cost take out,” he said.
