Sprint lowers EBITDA outlook, plans 2,000 job cuts

News Wireless United States 4 NOV 2014
Sprint lowers EBITDA outlook, plans 2,000 job cuts
Sprint's new CEO has announced plans to reduce operating costs by USD 1.5 billion and cut 2,000 jobs at the operator. The workforce reduction is expected to save USD 400 million a year. The company is also reviewing the rest of its management and plans to add more new candidates, both external and from parent company Softbank. 

Appointed in August, the new CEO Marcelo Claure aims to reposition Sprint as the 'best value in wireless'. In addition to cutting operating costs, Sprint is working to complete its network upgrade and LTE roll-out, which has been impacting the customer experience and increasing churn. Sprint lost 336,000 retail postpaid customers in Q3. Prepaid customers fell by 20,000, while the operator gained 840,000 wholesale connections. This left it with just over 55 million customers at the end of September. 

Postpaid ARPU fell to USD 60.24 from USD 61.65 in Q2 and USD 63.48 a year ago. Total revenues fell to USD 8.49 billion from USD 8.68 billion a year earlier, while the operating loss narrowed to USD 192 million from USD 398 million. Adjusted EBITDA rose slightly year-on-year to USD 1.386 billion or 18.6 percent of revenue. Sprint posted a net loss of USD 765 million versus a profit of USD 383 million a year ago. 

The company said the loss of customers and pressure on wireless revenue, as well as increased selling costs for new tariff plans, will put pressure on results in the last quarter. Sprint lowered its adjusted EBITDA forecast for 2014 to USD 5.8-5.9 billion from a previous estimate of USD 6.7-6.9 billion. The company still expects to meet its 800 MHz and 2.5 GHz deployment targets for the year, and now expects capital expenditures to be under USD 6 billion this year.

Categories:

Mobile

Companies:

Sprint,  Softbank

Countries:

United States

Tags:

Voice services, Data services, Financial figures

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