Sprint's CEO faces mounting challenges to turn company around
By Marina Lopes
WASHINGTON (Reuters) - When Marcelo Claure took the top job at Sprint Corp (S.N: Quote) two months ago, he faced an uphill climb in turning around the No. 3 U.S. cellular provider. On Monday, it became clear quite how steep that road to recovery will be.
The Bolivian entrepreneur, who was installed as CEO after the collapse of merger talks with T-Mobile US Inc TMUS.N, already faced the task of stemming growing subscriber defections as the company seeks to upgrade its subpar network.
He now will have to reckon with a worsening financial backdrop, as Sprint cut its full-year 2014 earnings forecast to between $5.8 billion and $5.9 billion from $6.7 billion to $6.9 billion.
The company also said it had lost 500,000 postpaid subscribers on a net basis even as rivals like T-Mobile were adding them.
Sprint responded by pledging to reduce annual costs by $1.5 billion and announcing 2,000 additional job cuts, but the damage was done. The results were bad enough that they triggered a profit warning at Japan's Softbank, its parent company.
The company also announced it will delay a nationwide roll out of its ultra high speed network and will instead focus on deploying it in a handful of cities.
"If you look at what is going on in our network it is getting substantially better. We have gone through a major rip and replace of the entire network. It is like starting fresh," Claure told Reuters in an interview on Monday.
Sprint's stock plummeted 18 percent on Tuesday, bringing the shares to their lowest level since Softbank, controlled by billionaire Masayoshi Son, acquired most of the cellular operator in July 2013. Continued...