Softbank CEO Masayoshi Son was upbeat on Wednesday about Sprint’s prospects, after the Japanese telco’s U.S. arm added 1.1 million customers during its fiscal second quarter.
For the three months to 30 September, Sprint reported net postpaid subscriber additions of 553,000, compared to a year earlier loss of 272,000. Sprint’s prepaid division lost 363,000 customers, but the addition of 866,000 wholesale and affiliate customers meant that overall, the company finished the quarter with a user base of 57.9 million, up from 56.8 million in the previous quarter and 53.9 million a year ago.
"We see a clear light at the end of the tunnel," Son said during Softbank’s results presentation on Wednesday. "Sprint is gaining momentum when it comes to net additions of postpaid [customers]."
In a statement on Tuesday, Sprint CEO Marcelo Claure said the quarterly performance "marked an inflection point" in the company’s turnaround strategy.
Indeed, postpaid churn at Sprint fell to a record low of 1.54%, down year-on-year from 2.18%.
Sprint is still challenged financially though, with Q2 revenue falling US$6.9 billion (€6.3 billion) from $7.4 billion a year ago. The telco swung to an operating loss of $2 million, compared to a profit of $501 million in the prior quarter; however, it was significantly narrower than the $192 million operating loss incurred a year earlier. Sprint’s net loss narrowed year-on-year to $585 million from $765 million.
In a bid to improve its financial position, Sprint aims to shave annual operating expenses by $2 billion-$2.5 billion, which will involve an unspecified number of job cuts. According to a Wall Street Journal report on Wednesday, Softbank is preparing to make thousands of Sprint employees redundant.
Son said cutting opex by $2 billion "is the minimum we should be able to achieve," adding that "there are no exceptions to reduction items; that includes labour as w ell."
Meanwhile, Softbank’s domestic mobile business, which includes mobile broadband customers and personal handy phone system (PHS), saw its customer base fall to 44.1 million during the quarter from 44.9 million a year earlier.
The decline was driven by losses at Softbank’s mobile broadband and PHS operations, offset slightly by its core mobile arm, which saw subscribers increase to 31.6 million from 31.0 million a year ago.
On the financial side, Softbank’s domestic telecom revenue increased to ¥783.4 billion (€5.9 billion) from ¥753.1 billion in fiscal Q2 2014. Operating profit grew 7.1% on-year to ¥210.3 billion.
In terms of Softbank’s consolidated results, revenue came in at ¥2.28 trillion (€17.2 billion), up 10% on last year, while operating income grew to ¥342.2 billion from ¥235.6 billion.
Net income fell to ¥258.6 billion from ¥491.1 billion a year earlier when Softbank benefitted from a one-off gain resulting from the IPO of Alibaba.
