uploads/2017/06/Telecom-Sprint-1Q17-Revenue-1.png

Analyzing Sprint’s Distribution Strategy in Fiscal 2017

By

Updated

Sprint’s distribution strategy

The biggest challenge that Sprint (S) currently faces is to build its brand and value proposition, as well as to improve consumer perception. As a result, marketing and distribution improvement remains a long-term goal for Sprint.

During the JPMorgan Tech, Media and Telecom Conference held on May 22, 2017, Marcelo Claure, Sprint’s CEO, was asked about Sprint’s distribution strategy. Claure stated that Sprint is underdistributed, especially from the perspective of company-owned stores.

As a result, Sprint is focused on a strategy of adding approximately 800 new company-owned stores in fiscal 2017[1. fiscal 2017 ending March 2018] to improve its brand presence and reduce the average cost per transaction. Sprint is also planning to add over 1,000 Boost prepaid stores.

Article continues below advertisement

Sprint’s indirect distribution

Sprint’s management highlighted that the company also believes in some indirect distribution, primarily owned by dealers and via digital sales. As a result, Sprint is seeking a combination of direct and indirect growth.

According to Sprint, optimizing and expanding its retail distribution could help attract new subscribers and boost the carrier’s total revenues. In fiscal 4Q16,[2. fiscal 4Q16 ended March 2017] Sprint had reported total revenues of ~$8.5 billion, compared to ~$8.1 billion in fiscal 4Q15.

Sprint’s top-line growth could depend largely on its capability to take market share from major US wireless carriers such as Verizon (VZ), AT&T (T), and T-Mobile (TMUS).

Advertisement

More From Market Realist