Paul Wilson: You Heard it Here First – Sprint is Coming Off Life Support

ready-sprint-scrum-planningYep, you heard it here first on KC Confidential…

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.”

storyboards-online-london-olympics-canoe-sprint-single-mensIn 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.

borat-thumbs-upYour Scribe’s prediction; T-Mobile – APPROVED.

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.

boswaltzdutchboyWhat’s all this mean? Sprint can take its proverbial finger out of the dike!

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.

This entry was posted in Paul Wilson. Bookmark the permalink.

6 Responses to Paul Wilson: You Heard it Here First – Sprint is Coming Off Life Support

  1. hot harley says:

    sorry paul…hate to bust your bubble but all this has been available for months.
    Anyone who months ago thought this merger was dead doesn’t know the
    power of the telecommunications lobby and cash.
    When one investor heard this he said that if they throw around enough money
    (especially with a major mid term election coming up) and the tentacles they
    have in the regulatory world this merger would happen. I got maybe 3 or 4
    investment letters a long time ago saying it will be a fight but these guys
    said it will happen. So theres no news here. Money greases thewheells….
    Ihave friends who have been at sprint their “entire lives” that during an
    xmas party said all these things.
    Dish and sprint merger talks went way back…I think they wrote they started
    in 2012…and that dish wanted a telecom……
    I have followed this via the big money investors in my building….knowing the
    people at sprint and having ties in the political spectrum to tmobile
    lobbyists both state and national.
    Once the news broke…and I mean once the rumours started….everyone in
    the investment community in kc was watching it and talking about all the
    stuff with sprint… a lot of this was being talked about a long time before
    your stories came out.
    These mergers are not secret. Insider talk and trading abounds (although
    its not to be done)…..but just like the cable merger Comcast and time
    warner….and with the politicians needing lots of cash real fast (especially
    the democrats….and I mean upwards of 200 million within the next
    120 days….deals get made.
    And these regulatory agencies…if you knew anything about their workings..
    yes…they’ll fight against consolidation “for the consumers welfare” but
    you’d be naïve to think these deals aren’t being made in some smoke filled
    We will have a major major scandal soon involving all these m and a’s…
    mark my words…even polson both sides of the aisle have said this….its just
    that all these things have been planned….organized and the orchestrated to
    look a certain way when all the players know whats the finl deal.
    as far as churn…from my position as a t mobile customer ….and from
    talking and hearing everything…t mobile has become a horrible service
    provider to its many customers. Cell towers down…poor phones (everyone I know
    has had to go thru 2 or 3 of their phones) but as the money guys take over
    they won’t care…it either them or no one when the dust settles.
    all part of corporate Americas plan. its not a conspiracy..its right in our
    faces….and they’re accomplishing more than any of us realize in their
    final goal to own everything !!!!! and control everything!!!!!!
    the banks are out to control all SOURCES OF LENDING…AND THEY’RE
    but I read some pretty heady newsletters…have contacts with some top
    people who have watched sprint and telecoms for years….
    Also….if you follow any consolidation of companies….there’s always
    cutbacks somewhere….they eliminate duplication of work….its as old
    as capitalism…so nothing new in that comment.
    Sincev this is so important to the kcc readers I will be adding comments
    as I hear them and follow up on your statements.
    But out here in the real world…nothing is secret…this is not news to the
    people in the trenches (investors/employees/etc)who spill the beans
    and hear the news long before you or I do.
    Look for a major merger of another large kc company coming up…
    it will shock people…..because this one is really HOME GROWN!!!!!
    thanks for your insight and stories.
    Your friend

    • paulwilsonkc says:

      My dear friend Harley, while you appear to be very much the cheerleader for Sprint now, thats not what you said when I was predicting success way back in April. In fact, here is what you said;

      harley says:
      April 24, 2013 at 3:28 pm
      Sprint posts lowest new subscriber numbers in 4 years, moves just 1.5 million iPhones
      Read more:

      These guys don’t know how to run a company…except in the ground!
      The writer says “good job”…i say someone needs to take over that
      company and get it straigthened out AND FAST.
      Maybe dish will come in and show these sprint people how to run a
      company. And dish is starting to sell advertising ontheir systems so
      theres gonna be additional big money coming in.
      bring back the original owners…they knew how todo it.
      I will be giving my financial paper in may which will go into details
      about this…stay tuned.

      You then sited the article in the link you posted in said comment that states;
      Sprint, the third-largest wireless carrier in the United States, said today it has added only 12,000 customers over last quarter. It represents the company’s lowest number of new customers since 2009, the NY Post reports.

      The company also admitted that it would have lost 252,000 customers if Nextel customers weren’t currently migrating during the deactivation of their network. There are only 1 million subscribers left on Nextel.

      Thats not very complimentary of where they were at the time either, and doesnt state anything positive. Just more doom and gloom while your Scribe was stating, NOT SO, a new days coming, Sprint WINNING.

      If I use your words and your facts alone, back in April, I was saying they will win; you were calling them losers.

      But then, above in todays comments, you want to state “sorry paul…hate to bust your bubble but all this has been available for months. Anyone who months ago thought this merger was dead doesn’t know the power of the telecommunications lobby and cash.”

      So while this may or may not have been available months ago, we can see from your own words, its not the side you were on, but clearly I was predicting it was headed for better days.

      I think, at least this time, thats Paul for the win…….

      Your friend, also, Paul.

  2. the dude says:

    Like we talked about wilsun the bigger story here in KC is when Sprint HQ makes like a tree and leaves KC with a skeleton office.

  3. Orphan of the Road says:

    Kind of like Custer telling his men at the Battle of the Greasy Grass, Men, the bad news is it appears we are done.

    The good news, we don’t have to go back through Nebraska.

  4. Eucfish says:

    If the Feds are going to allow Comcast to buy out Time Warner Cable, they sure better let Sprint and T-Mobile team up. Neither company is profitable, so a beefed-up #3 in wireless will have a better chance against the goliaths. Size helps cut better deals for equipment and handsets.

Comments are closed.