Sprint CEO: Macro Pressures Haven't Hurt Consumer Business
Published on: 18th September 2008
NEW YORK -(Dow Jones)- Macro-economic pressures haven't weighed on Sprint Nextel's consumer business, Chief Executive Dan Hesse said Thursday.
Sprint, however, sees an impact on the corporate side with fewer phones, he said during a Webcast conference presentation hosted by Goldman Sachs on Thursday. The Overland Park, Kan., company is the largest wireless provider to business in the U.S.
The company has done a good job of fixing its customer service problems, Hesse said, adding that the "house is clean," and Sprint will begin seeking new customers. It has been solely focused on retaining customers in the last few quarters.
"We feel good about inviting people in," he said, noting the marketing message to new people is starting to change.
On the balance sheet, Hesse said he would like to get to an investment-grade rating on its debt. The company recently tried to sell a convertible preferred-share offering, but had to scrap the offering because of unattractive rates.
Walking around from the deal indicates the company is strong enough that it didn't need the extra cash, Hesse said. He acknowledged that the weaker credit profile at Sprint compared to its peers led to investors to punish its stock worse.
Sprint shares recently rose 21 cents, or 3.5%, to $6.
Sprint still has a tough time adding customers. Hesse said he wouldn't rule out a price cut to spur growth, but said he would prefer to focus on the quality of care and adding features to its service.
He acknowledged that rivals AT&T and Verizon Wireless have a stronger position in areas where they can bundle their landline services. Sprint plans to target areas where they can't bundle, and looks to cable as another opportunity for bundling.
On next-generation WiMax wireless technology, Hesse said he was "very confident" that Sprint's deal with Clearwire will close in the fourth quarter.
After closing the deal, Clearwire will have to raise $2 billion in additional capital, Hesse said. He acknowledged the difficulties of tapping funds in this environment, but also noted the company is backed by major players such as Google and Intel.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; email@example.com
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