Sprint's Owner, Softbank, Committed to a Turnaround

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Sprint has a love-hate relationship with US customers – we hate their service, yet we would love to see them succeed.  Their wireless network is spotty at best, which tends to frustrate their current subscribers and makes it almost impossible to attract new ones – and they certainly have tried with recent incentives, including 'cutting your bill in half.'  On the other hand, we are also their biggest cheerleader, hoping they get their act together so we can see some real competition between Sprint and Verizon, AT&T and T-Mobile.  At the Converge technology conference in Hong Kong, Softbank's Group President and COO Nikesh Arora sat down and spoke with the WSJ and assured them that the company is committed to turning Sprint around, but warned that it will take some time, "Telecom business is a long-term business…It takes a while to shift the direction in the industry."

Japan's Softbank purchased Sprint in 2013 for about $22 billion in a bold attempt to expand its overseas presence and even attempted to purchase another US carrier, T-Mobile – this was abandoned due to regulatory issues.  When asked if he thought that Sprint's success required this consolidation, Mr. Arora said, "It just requires capital to transform the products [at Sprint]."  Back in June, Sprint's CEO Marcelo Claure, flew to Japan to meet directly with Softbank owner Masayoshi Son to discuss Sprint's new "Next Generation Network" strategy to which Son agreed to its full support.  Claure stated earlier this year that in two years they would have the top network in America.

Sprint continues to come under fire from analysts that believe they are moving too slow and are seeing no progress in Sprint's 'Next Generation Network' plan or better known at NGN.  Despite getting Softbank's approval to move ahead with the project, they are seeing little happening in the past month and it will probably not discuss much until their next earnings call.  Analysts must remember that 'rolling' out a new network takes careful planning and time – not to mention the 'mess' that Sprint is working with cleaning up the LTE mess left by the former network chief.  Sprint is mostly working with vendors to determine the best course of action to take, and BITG Analyst Walter Piecyk that they are "unaware of any vendor decisions that have been made."

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Despite all of the negativity surround Sprint, they do have a considerable amount of 2.5GHz spectrum and they also have an average spectrum of 120MHz in ninety of the top one hundred US markets, but it will take time to backhaul the newer technology across all of their sites.  This combined with Mr. Claure's vision and Softbank's support where Mr. Arora said that he and Mr. Son, "…spend a lot of time talking to each other about the way we see the world.  We see eye to eye on many things," Sprint may be a contender soon.