Nikesh Arora, the former Google executive who is now president of SoftBank, said that he's not worried about the continued concerns over the future Sprint, of which SoftBank is the majority owner. "I'm very relaxed," Arora told Bloomberg. "I'm here for at least the next 10 years."
Sprint will get $1.1 billion in cash from a handset leasing company that has been set up by parent company SoftBank and other investors designed to put the financing of leased devices off of Sprint's balance sheet and provide it with more liquidity. Sprint plans to immediately turn to setting up a similar structure to finance the purchase of network equipment.
So far, little is known about how Sprint might structure a network lease deal that it has talked about doing, but one thing is sure: Sprint needs to cut costs, and structuring a network lease deal could go a long way in that endeavor.
Sprint plans to cut thousands of more jobs as part of its effort to slash at least $2 billion in operating expenses from the business, according to Sprint Chairman and SoftBank CEO Masayoshi Son. Sprint CEO Marcelo Claure said he has been very direct with employees about the need to slash costs in a bid to get back to profitability, something Sprint hasn't really achieved in 11 years.
Sprint is starting to slash costs as part of a broader effort to cut $2.5 billion in expenses. The carrier expects to provide more details on the looming layoffs associated with the cost-cutting as well as its network densification plans when it reports quarterly earnings tomorrow.
The move away from device subsidies and the longer lifespan of smartphones is creating a booming business for device distributor Brightstar Corp. The company, which was founded by Sprint CEO Marcelo Claure back in 1997 and received a $1.26 billion investment from SoftBank in 2014, originally made a name for itself handling reverse logistics and distribution for wireless dealers and some regional operators, but now is at the center of the used phone supply chain. The company claims to have 200 operator customers and 40,000 retail customers.
Sprint CFO Tarek Robbiati said the carrier plans to cut about 10 percent of operating costs to save $2 billion and thinks the company can slash another $500 million in costs related to equipment spending. "Our cost structure is bloated," Robbiati told Bloomberg by phone from Tokyo, where he was meeting with executives from Sprint parent SoftBank.
Sprint CEO Marcelo Claure and Chairman Masayoshi Son have spent the last month and a half proclaiming that they have faith in Sprint and its turnaround efforts, with SoftBank snapping up shares in a show of confidence. However, some in the investment community are not as sure, and Moody's Investors Service downgraded its credit ratings on Sprint, saying that the carrier is not doing enough to right itself.
For the last couple of years, some have viewed Sprint as the Rodney Dangerfield of wireless. Indeed, the carrier has seen mostly negative press and perception ranging from subscriber losses to poor network execution to unfortunate technology selection, to M&A problems, and the list goes on. Add in a negative macroeconomic environment, unprecedented competition and some bad luck contributed to keeping Sprint down. Here's how I think Sprint got to its "no respect" predicament.
Softbank mobile customers will be able to sign up for Netflix service once the SVOD provider launches in Japan: the companies announced an agreement that makes it easier to subscribe to and pay for the online video service.