Sprint, having posted its first quarterly profit in years, “has turned around,” its chairman and principal owner said.
Masayoshi Son, whose Toyko-based SoftBank Group Corp. owns more than 80 percent of Sprint’s shares, declared the turnaround during an interview with Bloomberg Media’s David Rubenstein.
“It’s profitable now,” Son said during a wide-ranging conversation on “The David Rubenstein Show: Peer-to-Peer Conversations.”
Sprint had said in August that it earned a $206 million profit in April, May and June. The Overland Park-based wireless company also added customers during the quarter.
An update to Sprint’s finances and customer counts is expected later this month. Son’s comments strongly suggest that the company also will show a profit in the new quarter, which covers July, August and September.
CEO Marcelo Claure had said in August that the three-month profit marked a key moment because the profit was sustainable. But he had stopped short of declaring a turnaround.
“Sprint reached an important milestone this quarter by returning to profitability for the first time in three years,” Claure had said in the company’s announcement. “This represents the progress of a turnaround journey that has delivered improvements in postpaid phone and prepaid customer growth, a return to top-line growth, and a significantly transformed cost structure.”
Analysts widely expect Sprint to agree soon to merge with rival T-Mobile US, a deal that would combine the nation’s fourth- and third-largest wireless companies.
Washington previously balked at the idea of a merger, which Son campaigned openly for in 2014.
Son told Rubenstein that he bought Sprint with plans to acquire T-Mobile as well but had not expected resistance from U.S. regulators. Son said he could not say whether the Trump administration would accept a merger.
“I don’t know,” Son said, “but it’s their decision. I think it makes sense.”
Son repeated earlier arguments that a merged Sprint and T-Mobile would present stronger competition to industry leaders Verizon and AT&T. Washington regulators previously had rejected AT&T’s proposed acquisition of T-Mobile in part because they preferred four national wireless competitors to three.
President Donald Trump has appointed a new chairman of the Federal Communications Commission and head of the anti-trust division of the Department of Justice. The FCC recently declared the U.S. wireless market competitive for the first time since 2009.
Both agencies would review any proposal that would combine Sprint and T-Mobile. So far, no proposal has been announced.
Some have questioned whether Trump would balk at a merger that could eliminate many thousands of U.S. jobs.
Son had met with then President-elect Trump in December and promised to bring 50,000 jobs to the United States, in part through a large investment fund led by SoftBank. Sprint was expected to generate 5,000 of those jobs in part by moving customer service jobs from outside the United States.
Unconfirmed reports have said terms of a merger between Sprint and T-Mobile would value Sprint at its prevailing stock market value.
Yet, the purported deal also would give control to T-Mobile’s largest shareholder, Deutsche Telekom. Such transactions routinely pay a premium to shareholders who surrender control of their company.
In the interview, Son also said SoftBank’s investment in Sprint, a $21.6 billion deal in 2013, already has produced “a very good profit” for SoftBank.