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With T-Mo merger on table, Sprint has best quarter ever; Claure moves to Softbank

Michel Combes promoted to Sprint CEO role vacated by Claure

It has been a busy week for Sprint. On Monday the company agreed to merge with T-Mobile US to better compete against Verizon and AT&T. The combined company will be called T-Mobile and John Legere, CEO of T-Mobile US, will be the CEO of the new operator.

T-Mobile US is largely owned by Deutsche Telekom and Sprint is primarily owned by Japan’s SoftBank. With Legere’s ascension, Sprint CEO Marcelo Claure is being elevated to serve as COO of SoftBank and executive chairman of Sprint. Former Sprint CFO Michel Combes takes Claure’s place in the top spot.

And, with all these moving pieces, Sprint on Wednesday reported full-year and Q4 2017 results marked by prepaid and postpaid net additions and the “best profitability in company history” with operating income of $2.7 billion and “annual net income for the first time in 11 years,” according to the operator.

“In the fourth year of our turnaround, Sprint delivered the best financial results in company history as a result of growing our customer base and continuously improving our cost structure, while significantly improving our LTE network and initiating deployment for the first truly mobile 5G network in the U.S.,” Claure said. “By executing our turnaround, we have positioned Sprint for strategic opportunities which led to our proposed merger with T-Mobile, which will create an entirely new level of innovation and disruption in the industry.”

Here’s a look at key Sprint financials:

Sprint small cells and tri-band macro upgrades

Combes joined Sprint in January; he is the former CEO of French-based cable provider Altice, which also has a U.S. subsidiary. Working with cable companies has been a key piece of Sprint’s network densification strategy. The operator is collaborating with both Altice USA and Cox to leverage the cable companies’ networks to deploy small cells. In the earnings report, Claure highlighted Sprint deployed some 200,000 Magic Box small cell units in 2017.

“We have deployed thousands of traditional outdoor small cells with various vendors as well as thousands of strand mount small cells in cooperation with our cable partners,” Claure said on a call with analysts. “In fiscal fourth quarter alone, we deployed more outdoors small cells than the previous two years combined.”

He said Magic Boxes are live on the network in around 200 cities “making this one of the largest small cell deployments in the U.S., and I would plan to deploy more than 1 million Magic Boxes over the next two years.”

Elsewhere on the network front, Claure said the operator in 2017 upgraded “thousands of our existing macro sites” to support spectrum in the 800 MHz, 1.9 GHz and 2.5 GHz bands. He said the company has two bands “deployed on roughly 60% of our macro sites and expect to complete the substantial majority for tri-band upgrades by the end of fiscal 2018.”

Claure to SoftBank

With Legere taking the helm of the new combined U.S. carrier, Claure is taking on new roles as executive chairman of Sprint, COO of SoftBank Group and CEO of SoftBank Group International. He described new responsibilities during the earnings call, including working with Legere over the next nine to 18 months on gaining regulatory approval for the deal.

“In my new management role of SoftBank, my main responsibility will be to optimize synergies across group companies and how they can work with Sprint and, ultimately, the new company. I’ll continue to be responsible for SoftBank’s ongoing investment in Sprint and the combined Sprint-T-Mobile company…Both SoftBank and Sprint are fully committed to deliver…the world’s best and fastest 5G network, and together with T-Mobile, we intend to fulfill that vision.”

Before taking on his role at Sprint, Claure led global device distributor Brightstar, which SoftBank spent $1.26 billion to gain a controlling stake of in 2013. SoftBank CEO Masayoshi Son said experiences with Claure at Sprint and Brightstar make him “a close and trusted advisor…I can say he is an entrepreneur and operator unlike any other. Marcelo has done a remarkable job in turning around Sprint, which in fiscal year 2017 delivered the best financials in the company’s history, and has positioned the company as a true leader in the race to 5G, and he has fulfilled my original vision of combining Sprint with T-Mobile to create a company that will drive American leadership in mobile communications.”





Sean Kinney, Editor in Chief
Sean Kinney, Editor in Chief
Sean focuses on multiple subject areas including 5G, Open RAN, hybrid cloud, edge computing, and Industry 4.0. He also hosts Arden Media's podcast Will 5G Change the World? Prior to his work at RCR, Sean studied journalism and literature at the University of Mississippi then spent six years based in Key West, Florida, working as a reporter for the Miami Herald Media Company. He currently lives in Fayetteville, Arkansas.

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