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Thread: Inside SoftBank’s Struggle to Turn Around Sprint

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    Inside SoftBank’s Struggle to Turn Around Sprint

    Two years after SoftBank bought Sprint Corp. for $22 billion, Mr. Son seems stuck with a chronic fixer-upper. The Overland Park, Kan., company just slipped into last place in subscribers among the four major U.S. mobile operators. Sprint needs a massive network overhaul to stay competitive. And its shares have lost about half their value since the SoftBank takeover, the biggest ever by one of Japan’s best-known CEOs.

    Despite the pileup of problems, Mr. Son made a surprise appearance on Sprint’s quarterly earnings call last week to tell investors he remains committed to the “historical turnaround” at Sprint and doesn’t intend to sell it.

    He left out one telling detail: No one wanted to buy the struggling carrier.
    http://www.wsj.com/articles/doubts-g...int-1439346616

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    Wow. He went as far as calling it one of the biggest mistakes in his life and trying to sell Sprint to Comcast or Altice, unsuccessfully.

    I went ahead and read the article at WSJ. Below are some key points:

    • He left out one telling detail: No one wanted to buy the struggling carrier.

      Within the past year, Mr. Son and another top SoftBank executive floated the idea of a sale to cable-television giant Comcast Corp. and European telecommunications company Altice SA, say people familiar with the matter. It went nowhere.

    • In an interview, Mr. Son says he has been working for months with his 100 top network engineers seven nights a week from 10 p.m. to 2 a.m. to come up with a new fix-it plan for Sprint.

      “I should go back to where I was focused,” he says in a reference to the Internet side of SoftBank, which turned a $20 million bet on Alibaba Group Holding Ltd. into a $70 billion windfall when the Chinese e-commerce giant went public last year. The Internet revolution “continues to explode, and I should get back to where my passion still has a lot,” Mr. Son says.

      His hopes for resuscitating a merger with brash rival T-Mobile US Inc., dashed by regulators last year despite the CEO’s charm offensive, are on hold at least until after the presidential election in 2016.

    • Sprint hasn’t had an annual profit since 2006, piling up about $50 billion in losses. Last week, Sprint reported a net loss of $20 million in its fiscal first quarter. Revenue fell 8.7% to $8.03 billion.

      Analysts say the company is burning through cash even faster than before to fix its network and entice new customers.

    • Some people inside Sprint say Mr. Son didn’t fully anticipate how hard it is to quickly install cellphone antennas in the U.S. because of local zoning regulations.

    • “I was thinking to myself: ‘I made one of the biggest mistakes in my life,’ which was the misjudgment of the U.S. regulatory environment,” he says in the interview. Once the T-Mobile deal was dead, Mr. Son decided to “move on to the rest of the world and other businesses,” he says.

    • “I’m a busy guy,” he adds. “Why should I even concentrate on the U.S. market when the situation does not look good?”

    • At one point, Mr. Son even considered writing off Sprint as a total loss. Instead, the hands-on boss handed over the shake-up to a new CEO, Marcelo Claure, who replaced Mr. Hesse in August 2014.

    • But fixing the carrier’s network is staggeringly expensive. Sprint burned through $2.2 billion in the latest quarter, up from $496 million a year earlier. Some analysts say the carrier could run out of money by 2016 just as an important government auction of wireless airwaves gets under way.

      Meanwhile, Mr. Son felt boxed in. Fixing Sprint once and for all would “cost us tremendous money, and Sprint does not have that much money,” he says. Another problem: SoftBank’s covenants with Japanese banks prevent sinking more cash into Sprint.

    • (Regarding densification plan) At first, Sprint engineers and outside equipment vendors said the plan was impossible, according to Mr. Son.

      “They came up with hundreds of reasons why it cannot work,” he says. “I said: ‘OK, I will find a solution to each one of those 100 reasons of why it cannot work.’ And I came up with a very logical solution to all of them.”

      Sprint now plans to add tens of thousands of small cell sites to its existing network using technology it says costs far less than traditional methods.

      Mr. Son won’t say exactly how Sprint will pull it off.

    • Meanwhile, Mr. Son has been spending more time with Nikesh Arora, an executive he lured from Google Inc. last year. Mr. Son has said Mr. Arora would likely move into the top job at SoftBank when Mr. Son retires.

      Those are ominous signs for Sprint. In addition, Mr. Arora has privately expressed his frustration with SoftBank’s ownership of Sprint and has recommended trying to sell it, say people familiar with the matter.

      “Many people said that,” says Mr. Son. “It was not just one person.”

      Mr. Son declines to comment on the meetings but concedes in the interview that Sprint doesn’t look attractive to potential buyers right now.
    If you want to read the whole article yourself, copy the link below and Google it, then click on the article. It should then show you the whole article rather than show paywall.
    http://www.wsj.com/articles/doubts-g...int-1439346616

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    I always forget about the paywall. If you Google "Inside SoftBank’s Struggle to Turn Around Sprint" it'll come right up.

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    I don't think the small cell plan is impossible to achieve. Verizon has a much less spectrum advantageous setup for small cells compared to Sprint, and the lowest macro cell density of any US carrier, even lower than Sprint's, yet, they were 2nd in Speedtest.net's competition and 1st in RootMetrics in most markets.

    Otherwise, Masa has to either s*** or get off the pot. It's telling if Comcast or Altice balk because they think it can't turn around. I think SoftBank wasn't extreme enough in what they had to do. Sprint has been run too much like a carrier and not enough like a mobile internet provider using 2.6 GHz assets to leverage a good experience for consumers.


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    Let's not get too crazy about the state of things. Sprint is far better than T-Mobile in Indiana and throughout the Midwest. They will pull through in the end.
    I don't feel like a thread-killer...

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    Quote Originally Posted by pcjnyc View Post
    Sprint is far better than T-Mobile in Indiana? Someone lied.

    Attachment 129463
    I think kirt is in Indianapolis. T-Mobile struggles there. It's a rare mid-sized city where they're spectrum constrained.



    Still, it's a very tiny part of a national measurement that, on most levels including nationally, is very favorable to T-Mobile. Coverage wise, both of the smaller providers need work in the Midwest, but T-Mobile has made large improvements here with PCS LTE.


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    Quote Originally Posted by pcjnyc View Post
    Sprint is far better than T-Mobile in Indiana? Someone lied.

    Attachment 129463
    Foolish numbers to confuse the simple-minded. If you have T-Mobile in Indiana your phone is mostly a brick, I know from experience.

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    Quote Originally Posted by kirt View Post
    Foolish numbers to confuse the simple-minded. If you have T-Mobile in Indiana your phone is mostly a brick, I know from experience.
    So T-Mobile's 700 MHz build in IN isn't helping their coverage? Or are you just proving that you don't know what is going on with that buildout?


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    Quote Originally Posted by fraydog View Post
    So T-Mobile's 700 MHz build in IN isn't helping their coverage? Or are you just proving that you don't know what is going on with that buildout?


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    I have a friend at work who has been a T-Mobile customer for many years. He got a G4 to try and get help from 700mhz. He sees no difference. The refarm of LTE has helped speeds in the city. Outside the I465 loop is still all Edge or no coverage.

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    Inside SoftBank’s Struggle to Turn Around Sprint

    Quote Originally Posted by kirt View Post
    Let's not get too crazy about the state of things. Sprint is far better than T-Mobile in Indiana and throughout the Midwest. They will pull through in the end.
    Speaking as a former customer, I am glad to know that Sprint does well somewhere.

    To be fair, Sprint does a better job that T-Mobile on parts of the Oregon coast, but that is not a heavily populated area.
    "I didn't get fat by accident. This was a personal choice. " - Kevin Gillespie

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    Quote Originally Posted by mch View Post
    To be fair, Sprint does a better job that T-Mobile on parts of the Oregon coast, but that is not a heavily populated area.
    That's because that Oregon coast coverage was all from Nextel via synergy sites. Without the Nextel merger I doubt that Sprint would have had any coverage in some of those places.
    Sprint user since 1997

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    Quote Originally Posted by kirt View Post
    I have a friend at work who has been a T-Mobile customer for many years. He got a G4 to try and get help from 700mhz. He sees no difference. The refarm of LTE has helped speeds in the city. Outside the I465 loop is still all Edge or no coverage.
    That's a shame.

    Band 12 is showing up all over Southern Cali where I live. Areas that used to be no service zones for T-Mobile (inside buildings) now have full blown LTE like my local Target. My iPhone 6 that doesn't have Band 12 will be SOS but my Galaxy S6 that does have Band 12 shows LTE.

    I love it.

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    Interesting article.

    I wonder what the guys over on S4GRU think about what WSJ said


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    Inside SoftBank’s Struggle to Turn Around Sprint

    Quote Originally Posted by wiseguy321 View Post
    Interesting article.

    I wonder what the guys over on S4GRU think about what WSJ said


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    Some were wondering why Sprint was so open with the WSJ.

    My take was that there was nothing Sprint could do, it was out there, and that they'd be better off focusing on their own business and not worrying about the WSJ.


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    Quote Originally Posted by fraydog View Post
    Some were wondering why Sprint was so open with the WSJ.
    This makes me really wonder if the hardcore Sprint fans always knew how terrible the situation on the inside is, but were keeping their mouth shut and doing anything and everything in their power to distort the reality and hide the truth, or were they simply manipulated over the years into believing that the most incredible network is right around the corner?

    Honest question.
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