Sprint’s Q4 Meets Mixed Reviews as Merger Looms

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Sprint’s CEO Michel Combes said, during the company’s Q4 2018 announcement on Tuesday, he is optimistic that the government will see the compelling arguments in support of their merger. If the merger doesn’t go forward, Combes said, he expects to continue to make improvements to the business, including their next-gen network deployments but it will require they “reposition the company.”

“We’ll have to narrow our geographic focus,” Combes said. “We will be less of a nationwide competitor.”

The merger loomed large as Sprint (S) reported mixed Q4 2018 results Tuesday. Revenue and Adjusted EBITDA were ahead of analysts’ estimates and Street consensus. 

”Sprint was clear that without scale it would be very difficult for it to compete effectively vs. the other national competitors,” said Jennifer Fritzsche, Senior Analyst with Wells Fargo Securities. “We believe S is focused on what is in its control right now, which is building a spectrum-rich 5G network and managing its liquidity as it waits for a formal ruling on the TMUS merger.”

Fritzsche said the carrier highlighted that it had 2.5 GHz spectrum deployed on 80 percent of its existing macro sites (up from 60% y/y), and ~30K outdoor small cell nodes on air (includes strand mounts and mini macro sites). The company announced it plans to launch mobile 5G and has targeted nine major markets for its initial 5G launch; Chicago, Atlanta, Dallas, Kansas City, Houston, Los Angeles, New York, Phoenix, Washington, D.C.

May 9, 2019

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