It seems like a lifetime ago but in a previous career I used to enjoy asking the awkward questions of company executives. Quite often it was less for the answer to the question but in how the answer was delivered: company executives need to thread a narrow line between being confident, assured and bullish about their business, but to also respond well to criticism. I've never had a shoe thrown at me because of my questioning (but it was being unlaced ready for the toss!) but this is the sort of pressure that Sprint's new Chief Executive Officer, Marcelo Claure, is about to face. Since taking on Sprint in August 2014 he has cut prices and jobs but increased data allowances. Tonight, however, he is perhaps facing his biggest challenge yet: delivering Sprint's quarterly results this evening to industry analysts. Marcelo will be facing questions regarding his plans and vision for improving Sprint as a business, boosting results and their flagging network in equal measure.
From a business perspective, the other US carriers have announced solid growth in their number of subscribers. Have these all come from Sprint? Not all but many have, yes: Sprint are plagued by customer service and network pressures (real or perceived) and this will continue to put pressure on the carrier. Credit Suisse wrote a research note at the end of October citing, "We believe Sprint continued to see pressure on subscriber metrics through the first two months of the quarter, but saw an improvement in September owing to pricing changes. As such, we're reducing our fiscal 2Q14 (calendar 3Q14) net add estimate to a loss of 100k from a gain of 100k."
The short term numbers may be disappointing, but I expect the industry to look beyond these. Sprint's difficulties are well known but it's how the business copes with the coming quarters and years that's of more interest to investors. Here's where Marcelo can make an impact: his vision will drive the business. We're seeing positive noises from the business suggesting that there's something of a refocus going on behind the scenes. The announcement that they are to concentrate their high speed LTE coverage rather than aim to blanket the US with high speed coverage is broadly good news. It also manages expectations. It seems that the policy is to aim lower and outperform, rather than aim high and underachieve. And you know what, a part of me is starting to miss my old career. I'd love to be asking Marcelo the awkward questions tonight!