Sprint’s cost-cutting initiatives
As Sprint (S) is the fourth-largest mobile carrier company in the United States, it’s making significant efforts to tap more market share in the wireless space. Sprint’s cost-saving measures remain impressive and have significantly contributed to its turnaround in subscriber additions over the past several quarters.
During fiscal 2017, Sprint realized nearly $1.1 billion in net cost reductions, including lower costs of services and SG&A (selling, general, and administrative) expenses, excluding hurricane-related and other nonrecurring charges.
These cost reductions targeted changes in its device insurance program as well as lower network expenses. Notably, Sprint cut $2.1 billion in costs during fiscal 2016.
Sprint’s ongoing initiatives to reduce its costs and expenses have been reflected in its improving net income. In fiscal 2017, the company reported positive annual net income for the first time in 11 years, even after excluding the one-time favorable impact of $7.1 billion from tax reform.
Additionally, Sprint reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $11.1 billion in fiscal 2017, its highest adjusted EBITDA in 11 years.
At the end of 1Q18, by customer base, Sprint remained the fourth-largest player in the US wireless industry. In this market, the two largest telecommunications companies are AT&T (T) and Verizon (VZ). T-Mobile (TMUS) had the third-largest wireless subscriber base in the United States at the end of the same quarter.
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