uploads/2018/01/Telecom-Sprint-3Q17-Revenue-2-1.png

Sprint Is Still Focused on Expanding Its Distribution Footprint

By

Updated

Sprint’s distribution strategy

The biggest problem that Sprint (S), the fourth-largest wireless service provider in the United States (SPY), currently faces is building its brand and value proposition and improving consumer perception. As a result, marketing and distribution improvements remain a long-term objective for the company.

Sprint is optimizing and expanding its retail distribution to lower its average cost per transaction, increase its brand presence, and better serve its customers. In December 2017, Sprint’s management highlighted that the company had added 600–700 stores in the previous two to three quarters. Further, the company’s management said, “We are attacking distribution across our own footprint, distribution partner’s footprint and digital, and that’s the story for fiscal year 2018 as well.”

Article continues below advertisement

Sprint’s revenue trend

Sprint’s management believes that the expansion of its distribution footprint could help attract new subscribers and boost the company’s total revenue. In fiscal 2Q17 (the quarter ended September 2017), Sprint reported total net operating revenue of $7.9 billion compared to $8.2 billion in fiscal 2Q16. Sprint’s top line growth could depend largely on its ability to take market share from other major US wireless service providers such as Verizon (VZ), AT&T (T), and T-Mobile (TMUS).

Let’s take a look at the total revenue growth of the other major US wireless service providers in 3Q17. AT&T’s total revenue fell ~3.0% YoY (year-over-year) to $39.7 billion, whereas T-Mobile’s total revenue rose ~7.7% YoY to $10.0 billion. Meanwhile, Verizon’s total revenue rose ~2.5% YoY to $31.7 billion during the same quarter.

Advertisement

More From Market Realist