Softbank on Thursday posted a strong set of fiscal first quarter results and reaffirmed its commitment to reviving the fortunes of Sprint.
In the three months to 30 June, the Japan-based telco generated sales of ¥2.1 trillion (€15.7 billion), up 10% on last year, as growth in its domestic market combined with the yen’s depreciation against the dollar offset a decline in sales at its U.S. arm Sprint. Operating income grew 8% to ¥343.6 billion (€2.5 billion) thanks to strong smartphone sales in Japan, and lower costs and a growing customer base at Sprint.
Earlier this week, Sprint announced it added 675,000 subscribers during its fiscal first quarter, including 310,000 postpaid additions. However, it wasn’t enough for Sprint to hold on to third spot in the U.S. mobile market, and it was overtaken by T-Mobile US, which added 2.1 million customers over the same period.
In its earnings presentation, Softbank reaffirmed its commitment to reviving Sprint’s fortunes by applying the same methods it used to revive its own.
It is nine years since Softbank acquired Vodafone Japan; its annual operating profit reached ¥695 billion in full year 2014 up from ¥76 billion in the year before the takeover. It achieved this by m aking steep cuts in operating expenses, maximising capex efficiency, investing in its network, and reducing debt, Softbank said.
Sprint is already showing encouraging signs. Since the appointment of Marcelo Claure as chief executive last summer, Sprint’s churn has lowered to 1.56% from 2.3%, and it has returned to quarterly net subscriber growth. The telco has also swung to modest operating profits and dramatically narrowed its quarterly net losses.
On Tuesday it reported that fiscal first quarter operating expenses fell to US$7.5 billion from $8.3 billion a year earlier.
Softbank said it sees "light at the end of the tunnel" for Sprint.
