Sprint CFO: The sky isn't falling, management is working with SoftBank's Son

Sprint's (NYSE:S) management and the wider company is in line with the thinking of its hard-charging chairman, SoftBank CEO Masayoshi Son--contrary to a recent report of friction between Son and some Sprint executives, according to Sprint CFO Joe Euteneuer.

Speaking Monday at the Deutsche Bank Media, Internet & Telecom Conference, Euteneuer used Son's nickname and said that "Masa is one of those guys who wants to get it done and wants to succeed, and we all buy that."

According to a recent and detailed profile of Son in the Wall Street Journal, the SoftBank chief has been meeting numerous times with Sprint executives both in-person and through video conferencing, and is working to instill a fast-paced, Silicon Valley-style attitude to shake up Sprint. According to the report, which cited unnamed sources, Son is working to bring 1,000 SoftBank employees from Japan to California to help remake Sprint into a relevant competitor in the U.S. wireless market. He has also challenged the carrier's advertising and marketing initiatives, and has urged Sprint management to come up with more compelling service pricing--the result of that effort is Sprint's new Framily plans, introduced in January.

Euteneuer said that biggest benefit Sprint has seen from the SoftBank deal has been its contract for new radios for its 2.5 GHz TD-LTE deployment, which is being done by Alcatel-Lucent (NYSE:ALU), Samsung and Nokia (NYSE:NOK) Solutions and Networks. Euteneuer said that Sprint got the equipment with a "great discount, great financing terms" and better terms "than we could have done as a standalone company." He also said SoftBank's purchase of a 57 percent stake in wireless distributor Brightstar Corp. for $1.26 billion opens up opportunities for the three companies to figure out how to reduce costs.

Additionally, Euteneuer said that the finance teams between SoftBank and Sprint work "hand and glove--we have to." He said Sprint has also picked up a great deal of expertise and knowledge on how best to deploy 2.5 GHz spectrum, which SoftBank also holds in Japan, especially for small cells and in dense, urban environments.

"I know a lot of people want to say the sky is falling and all of that, but, you know, I wouldn't believe everything you read," he said.

The Sprint CFO was also asked about the recently announced departures of Steve Elfman, president of network operations at Sprint, and Bob Azzi, the carrier's senior vice president of networks. He said that after SoftBank took control of Sprint last summer, many longtime executives began plotting when they might leave Sprint, including CMO Bill Malloy, who is leaving at the end of March and will be replaced by Jeff Hallock.

"Steve has been a guy who has been very vocal about his retirement, and has worked to really keep the network organization in sync, ready to go upon his exit," Euteneuer said. "Bob's another guy who thought the same way. These guys have spent a tremendous amount of time at Sprint, getting it to where it is." He said their departures are "not one of these shocks to the system."

John Saw, Clearwire's former CTO, has been promoted to Chief Network Officer of Sprint. Saw had previously been Sprint's senior vice president of technical architecture. Additionally, some of Azzi's former organization will now report to Stephen Bye, Sprint's Chief Technology Officer.

Euteneuer said Saw and Bye are "two great guys" and are "fabulous." He said that they "have spent well over a year working with Steve and Bob to make sure there are no bumps in the night," and that Elfman "wouldn't have left unless he felt it was done."

That said, Euteneuer acknowledged that Sprint still has work ahead of it to cover 250 million POPs with LTE on its 1900 MHz spectrum by mid-year. Sprint has said it expects churn to remain elevated through that point in time and then gradually improve in the second half of the year as the network improves.

Euteneuer reiterated that Monday. He said that in markets that are 70 percent completed, churn starts dropping down to pre-construction levels and then even improves more after that, pointing to Chicago as an example.

Euteneuer also said that Sprint has been pleased with how its new "Framily" plans have been received in the market. "It's clearly been well received," Euteneuer said of the Framily plans, which represent Sprint's response to price cutting from other carriers including T-Mobile US. "Maybe it's done a little better than expectations."

Still, he said it is too early to provide specifics on how Framily plans have impacted gross subscriber additions, adding that the plans have only been in the market since mid-January and that Sprint is still working to expand them beyond Sprint-branded retail stores to other distributors.

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