Another management change at Sprint in wake of T-Mobile merger failure

Sprint finance chief Tarek Robbiati is being replaced by Michel Combes, whom Sprint described as “a turnaround strategist.”
Sprint finance chief Tarek Robbiati is being replaced by Michel Combes, whom Sprint described as “a turnaround strategist.”

Sprint’s chief financial officer, who engineered billions of dollars in financing and cost cutting during the company’s cash-strapped years, is being replaced.

Tarek Robbiati will leave the Overland Park-based wireless carrier at the end of January. He is being succeeded by Michel Combes, whom Sprint described as “a turnaround strategist who achieves success through a mix of growth and cost management.”

Tarek Robbiati from Sprint Nov 2015
Sprint finance chief Tarek Robbiati was among a team of international executives that CEO Marcelo Claure attracted to the company, and he is the second to leave after merger talks with T-Mobile failed. James Allison

Robbiati has been the company’s chief financial officer since joining the firm in 2015 in a class of international executives attracted by CEO Marcelo Claure. His exit is the second high-profile departure since merger talks with rival T-Mobile ended in early November. Last month saw Günther Ottendorfer leave his post as Sprint’s chief operating officer for technology.

Combes starts Jan. 6 as Sprint’s president and chief financial officer. Sprint said that Combes’ reputation stems from his tenures at Alcatel-Lucent and France Telecom.

He had joined Alcatel-Lucent in 2013 “when the company was near bankruptcy,” according to Sprint’s announcement. As its CEO, Combes helped arrange Alcatel-Lucent’s sale to Nokia.

Analysts voiced different themes about the change with one suggesting it could mean Sprint still is looking for a merger.

“Based on Mr. Combes’ background, we believe the decision was primarily based on Sprint’s desire to pursue a transformative transaction,” Jeffrey Kvaal at Nomura Instinet wrote to clients in a note Thursday. “A cable tie-up seems likely given Sprint’s recently announced MVNO agreement with Altice.”

Combes most recently was CEO of Altice and held that post when its U.S. business recently reached the network agreement with Sprint. The deal allows Altice USA to sell wireless services using Sprint’s network and allows Sprint to piggyback on Altice’s cable footprint to spread its wireless network.

Sprint spokesman Dave Tovar commented on Kvaal’s note with an email acknowledging that the company continues to evaluate “strategic arrangements” as part of its transformation.

“As we’ve said, we are focused on operating Sprint as a standalone plan. However, we are always open to looking at possible alternatives to create shareholder value. We recognize the benefits of scale and as content and connectivity continue to converge, we will continue to pursue strategic arrangements across multiple industries, like we did with the Altice agreement we announced in November.

“Michel’s (Combes) experience across the telecommunication and cable industries will be invaluable to Sprint as we execute the next phase of our transformation.”

Sprint’s announcement said Combes had been at France Telecom from 2003 to 2006, having joined when “it was the second most indebted company worldwide in terms of short-term liabilities.”

Combes previously served as an adviser to Claure’s Miami-based business, Brightstar Corp., helping it expand globally. Brightstar grew to $10 billion in revenues and was purchased by Tokyo-based SoftBank Group Corp., the same company that had purchased control of Sprint, allowing Claure to join Sprint.

“I have known Marcelo (Claure) for many years and am delighted to join the Sprint team and build upon the great progress achieved to date,” Combes said in the announcement. “This is an exciting challenge and unique opportunity to help lead a distinguished company through an historic turnaround and its most exciting period yet.”

Outsiders say Sprint’s failure to reach a merger with T-Mobile has generated new financial burdens, including increased spending on its network in the face of maturing debts in the next few years.

“Unfortunately, we believe this feeds the narrative of concern that Sprint needs to spend on network and continue to aggressively cut costs,” analyst Jennifer Fritzsche said of the executive change in a note Thursday to clients of Wells Fargo Securities.

Robbiati had lowered the cost of capital at Sprint, helping engineer creative financing sources using customers’ leased cellphones, network equipment and even the wireless airwaves that carry customers’ calls and downloads.

“However, at this point in Sprint's evolution we believe Combes’ turnaround expertise will be well served,” Fritzsche wrote.

Mark Davis: 816-234-4372, @mdkcstar