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Kagan: Why Sprint is cutting costs

Why has there been so much written about Sprint cutting costs in the last few days? This is not a surprise. This is exactly what it should be doing. This is exactly what every company is supposed to do. Sprint is supposed to focus on increasing revenue and decreasing costs. It is supposed to do this on an ongoing basis. So why make such a big deal about an expected and normal event?

Remember, Sprint is under new management. That means for a while the changes will be more dramatic. This typically happens after a change in leadership at any company. And it happens on both the growth side and the cost-cutting side.

So if Sprint is just acting normally, why are some in the media writing about this cost cutting like it is a problem? This is not a problem, it is exactly what Sprint should be doing.

Sprint did have problems several years ago. Back then it was losing market share and revenue. Back then it had to cut jobs, retail locations and employees in order to stay afloat. Back then it did what it had to do. Back then, the moves were a sign of a company having serious problems.

That’s not the case today. Today Sprint is in the middle of a reinvention of the company. That means today it must focus on both sides of the coin, increasing revenue and decreasing costs. Sprint has been increasing revenue and market share, and now it also must cut costs, like every company must do. And that’s what it is starting to do now.

Sprint cost cutting is good news

That’s why this move from Sprint is good news and expected. Over the last year or so, we have seen Sprint start making real gains. While it had been losing for years, it now has begun to successfully turn things around by increasing market share and revenue.

Now it also looks like Sprint is starting to focus on cutting costs – right sizing – something every company should always do on an ongoing basis.

While this move is not a guarantee that Sprint will flourish going forward, it is exactly the right thing for it to do at this point. This is a case of one step at a time.

Transformation of the wireless tndustry

This is not just a matter of recovery, it’s also a matter of reinvention. Sprint is transforming into a company, which will be different going forward just as the wireless industry is changing and will be different going forward.

This is, in fact, happening at every wireless carrier. Carriers in the wireless space are all looking ahead and seeing that things look different. We will see lots of new opportunities and changes going forward from all the players. We have seen so much change over the last few years and that pace of change is only accelerating.

So the good news is that as Sprint continues to grow and reshape the business, it is also something they will continue to do on an ongoing basis. Remember, continual rightsizing is just a regular part of doing business.

With all that said, Sprint is doing exactly what it should be doing. It’s normal. It’s what companies do on a regular, ongoing basis. It’s simply the second part of a two-part plan to grow the company and manage costs.

The company still has a way to go so we will keep our eyes on them. However, so far I see them being on the right track.

ABOUT AUTHOR

Jeff Kagan
Jeff Kaganhttp://jeffkagan.com
Jeff is a RCR Wireless News Columnist, Industry Analyst, Key Opinion Leader and Influencer. He shares his colorful perspectives and opinions on the companies and technologies that are transforming the industry he has followed for 35 years. Jeff follows wireless, wire line telecom, Internet, Pay-TV, cable TV, AI, IoT, Digital Healthcare, Cloud, Mobile Pay, Smart cities, Smart Homes and more.