Sprint executive offers glimpse of funding plan, takes shot at T-Mobile

Sprint chief financial officer Tarek Robbiati provided a glimpse of the company’s complex funding plans Wednesday and took a shot at rival T-Mobile US.

Robbiati spoke at an industry conference in New York a day after T-Mobile said it would allow its customers to stream video from 24 services, including Netflix and Hulu, without counting it toward their monthly data use limits. The videos will stream at DVD quality, which is less than high-definition quality video.

The new feature is called Binge On.

Robbiati said the name seemed appropriate. The move was clever and involved an underlying price increase but raises network capacity questions, he said.

“It looks like a hangover is going to come at some point,” Robbiati said.

Robbiati has been a key voice in Sprint’s plans to cut $2.5 billion in operating and equipment costs, though he joined the company only a few months ago. He said all parts of the business — billing, marketing, sales commissions, customer care, roaming charges paid to other carriers — are getting scrutinized.

“We’re asking for productivity increases throughout the company,” he told an audience of investors and analysts.

Robbiati did not mention layoffs, but the company has acknowledged jobs will be cut, and its chairman, Masayoshi Son of SoftBank Group Corp., has said they will number in the thousands.

Robbiati, who had been with Australia’s Telstra wireless carrier in the past, said he was struck by Sprint’s complexity and said it doesn’t need to be that way.

At the same time, he is helping put the finishing touches on a multiparty, first-of-its-kind funding deal to supply phones to customers. The deal involves Son’s SoftBank in Tokyo, which owns more than 80 percent of Sprint; Miami-based Brightstar Corp., which was founded by Sprint chief executive Marcelo Claure and now is owned by SoftBank; and Japanese banks, Robbiati said.

The deal will spare the heavy drain on Sprint’s cash reserves when customers lease new phones.

At the same time, Robbiati hailed Sprint’s industry-leading push into leasing phones to customers instead of selling them.

The lease, he said, amounts to a “constant contract” that helps bind the customer to Sprint. Sprint has suffered higher customer defections than its rivals, or what the industry calls customer churn.

“Churn is the number one enemy of a mobile company,” Robbiati said. He called leasing a “churn killer.”

As for Sprint’s turnaround, Robbiati said U.S. consumers pay relatively high prices for mobile services. That doesn’t mean Sprint is planning price cuts; its prices already are competitive.

“There’s room for all four players to be prospering,” Robbiati said. “I assure you, there are more competitive markets than the United States.”

This story was originally published November 11, 2015 at 8:28 AM with the headline "Sprint executive offers glimpse of funding plan, takes shot at T-Mobile."