I went against the current, swam upstream and correctly predicted the Sprint-Softbank merger before anyone. Dish had been the heavy media favorite.
For several days, if you Googled the proposed merger, our KCC story was in the Top 10 results.
Reader response to those early stories; about 50 comments predicting Sprint’s death.
I followed that up with a couple more installments and still the comments spoke of doom and gloom. And then I predicted a few weeks back that we were going to start to see cutbacks. And so what’s been announced of late; more cutbacks.
Now Sprint says it’s “capped a tumultuous year of deal wrangling and network rebuilding by posting what one analyst called signs of genuine progress” in the company’s 4th-quarter report released Tuesday.
And Sprint added 477,000 subscribers in the last three months of 2013, boosting its revenues and trimming its financial losses – even in the face of gains by its wireless industry rivals. No small feat, considering where the company has been.
“Sprint showed signs of genuine progress in righting the ship,” said an analysis written by Craig Moffett of Moffett Nathanson Research, one of Sprint’s more prominent doubters. “Investors will likely view the results as a clear positive step towards stabilization.”
In addition to all that, Sprint’s CFO, Joe Euteneuer, told analysts the company had “turned the corner” on how much its revenues exceed its operating costs of running the business, although the overall results weren’t yet where he wants them to be.
The reason for all of this?
Two things; customer service ratings are improving so much that Sprint is able to cut back headcount in the call centers that were previously handling customer complaints.
It doesn’t get any better than that; those are the kind of layoffs you want.
So how’s all this going to affect the proposed T-Mobile merger?
That’s purely a regulatory agency call. Will they see this as a weakening of competition in the marketplace? I think Washington clearly wants to block the deal and will try hard to do so.
And there’s more good news soon to come.
For one, Sprint is in the process of their multi gazillion dollar upgrade to its network. That will further slow the churn through better service and fewer dropped calls.
Second, and equally important, Softbank’s influence in terms of features and speed, benefits from the merger, have yet to been seen; but trust me, they will soon.
When you have more customers going out the back door than are coming in the front door, it’s the human equivalent of having a pint of blood put in your left arm while a pint and a half drains out your right.
Sooner or later, you come to the realization that you’re losing the game.
It’s called bleeding to death if it happens in the ER and it’s called “churn” when it happens to a telecom company. In both cases it’s fatal.
You are about to witness the color coming back into our telecom patient. It may need to be transferred to California for some sun and better weather, but a healthier Sprint is right around the corner…even if it makes for a smaller corner in Leawood than it’s ever been.
And that’s exactly what’s about to happen.