Sprint's LTE Network Is 'Substantially Complete,' CFO Says

By Todd R. Weiss  |  Posted 2014-12-05 Print this article Print

Sprint's ongoing network upgrades mean that the carrier is poised again for customer growth and increased customer satisfaction, Sprint's CFO tells investors.

Sprint has experienced network problems and customer losses due to service dissatisfaction in the recent past, but things are getting back on track now due to the huge progress made in getting the company's wireless network updated.

That was the message from Sprint Chief Financial Officer Joe Euteneuer, who shared an update on the company's network status at a Bank of America investor conference earlier this week, according to a report by Wireless Week.

So far, Sprint covers 260 million people with its 1,900MHz Long Term Evolution (LTE) network and another 92 million on its 2.5GHz spectrum, the report stated. But by the end of 2014, Sprint expects that up to 100 million people will be covered with its 800MHz LTE deployment, according to the news story.

"I think from a network standpoint we have been waiting to get to this point of having a network that is substantially complete," said Euteneuer at the conference.

That's good news for customers and potential customers, Euteneuer said, according to the Wireless Week report. He "acknowledged that Sprint's network has been a weak spot for the carrier, saying that the company had been experiencing subscriber losses" due to problems and ongoing construction work on the network that was often disruptive to wireless service.

Now, though, much of that upgrade work is finished and the company can again take on its rivals head-to-head, he said.

"If you can go from 750,000 a quarter loss to something close to zero in one quarter, that's a miraculous recovery," Euteneuer told the conference audience, according to the report.

Sprint has already started some serious attempts to increase its customer base, thanks to a half-price wireless service offer it made recently to existing customers of competitors Verizon Wireless and AT&T if they move their service to Sprint. The "Cut Your Bill in Half Event" also matches a customer's data plan caps at half of their existing rates for new customers who make the service transfer. The new offer is not set to expire and will be Sprint's lure for new customers into the future. The offer includes unlimited talk and text to anywhere in the United States while on the Sprint network, regardless of a customer's current plan. Participating customers will have to get new devices through Sprint, but will also get up to $350 in rebates per line to cover early termination fees with their existing carriers.

The half-price offer is not being extended to T-Mobile customers, which is intriguing because Sprint tried and failed to acquire T-Mobile earlier this year.

Since August, the big four carriers—Sprint and its three major U.S. competitors, AT&T, T-Mobile and Verizon—have been continuing to pummel each other over prices, data packages and other features in the war for more customers and revenue.

In November, Sprint apparently again started to get the acquisition itch, some three months after it failed in an attempt to acquire T-Mobile earlier this year, by eyeing the potential purchase of a Los Angeles startup, FreedomPop, according to an earlier eWEEK report. FreedomPop is a free Internet and mobile phone service provider.

The potential acquisition inquiry followed some tough recent months for Sprint, which is the No. 3 wireless company in the United States, behind Verizon Wireless and AT&T, and ahead of T-Mobile.

In early August, Sprint dropped its plans to buy T-Mobile after the move was opposed by regulators, according to reports. Sprint had been rumored for months to be seeking a merger with T-Mobile so that the two struggling companies could join together and fight harder to compete with mobile powers Verizon Wireless and AT&T. Neither company ever commented on those rumors until Sprint finally said in August that it was giving up its plans.

Following the aborted merger attempt, Sprint then shook up its executive ranks by replacing its CEO, Dan Hesse, with Marcelo Claure, the founder and CEO of Brightstar, a subsidiary of Softbank, which is also Sprint's parent company.

Also in November, Sprint announced disappointing financial results for the second fiscal quarter of 2014, having lost $192 million on consolidated net operating revenue of $8.5 billion. Sprint lost some 272,000 postpaid customers in the quarter and announced that another 2,000 employees will lose their jobs as the company tries to save money and turn its financial performance around, putting more sour notes on its earnings call.


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