Sprint Corporation, through its subsidiaries, provides various wireless and wireline communications products and services to consumers, businesses, government subscribers, and resellers in the United States, Puerto Rico, and the U.S. Virgin Islands. The company operates in two segments, Wireless and Wireline. The Wireless segment offers wireless data communication services, including mobile productivity applications, such as Internet access, messaging, and email services; wireless photo and video offerings; location-based capabilities comprising asset and fleet management, dispatch services, and navigation tools; and mobile entertainment applications. It also provides wireless voice communications services that include local and long-distance wireless voice services, as well as voicemail, call waiting, three-way calling, caller identification, directory assistance, and call forwarding services. In addition, this segment offers voice and data services internationally through roaming arrangements; and customized wireless services to large companies and government agencies, as well as sells wireless devices, broadband devices, connected devices, and accessories to agents and other third-party distributors. The Wireline segment provides wireline voice and data communications, including domestic and international data communications using various protocols, such as multiprotocol label switching technologies, Internet protocol (IP), managed network services, Voice over IP, session initiated protocol, and traditional voice services to other communications companies, and targeted business subscribers. Sprint Corporation offers its services under the Sprint, Boost Mobile, Virgin Mobile, and Assurance Wireless brands. It offers products through its 300 branded retail locations in the Southern California region. The company was founded in 1899 and is headquartered in Overland Park, Kansas. Sprint Corporation is a subsidiary of SoftBank Group Corp.
Business Analysis of Sprint
The Telecommunications Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Sprint compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Sprint to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Sprint with an interactive chart.
- Revenue Growth: Sprint reported a revenue growth of -6.8% year-on-year during 2016. Telecom Services Industry grew at 8.6% in the same period
- COGS share of Revenues: As a percentage of revenue, Sprint spent 47.3% of its total revenues on COGS. Telecom Services industry average (COGS share of revenue) in the same period was 37.8%
- R&D share of Revenues: Sprint R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Sprint spent 26.3% of its total revenues on Sales, Marketing, and General Administration (SG&A). Telecom Services industry average SG&A spending in the same period was 26.6%
- Inventory share of Revenues: As a percentage of revenue, Sprint spent 3.6% of its total revenues on Inventories. Telecom Services industry average Inventory spending in the same period was 0.9%
- Accounts Payable share of Revenues: As a percentage of revenue, Sprint invested 9.0% of its total revenues on Accounts Payable (A/P) Telecom Services industry average Accounts Payable investment in the same period was 15.9%
- Accounts Receivable share of Revenues: As a percentage of revenue, Sprint invested 3.4% of its total revenues on Accounts Receivable (A/R). Telecom Services industry average Accounts Receivable investment in the same period was 11.4%
- PP&E share of Revenues: As a percentage of revenue, Sprint invested 63.1% of its total revenues on Property, Plants, and Equipments (PP&E). Telecom Services industry average PPE investment in the same period was 79.2%
- Intangibles share of Revenues: As a percentage of revenue, Sprint invested 158.8% of its total revenues on Intangibles. Telecom Services industry average Intangibles investment in the same period was 116.1%
- Net Margins: Sprint Net Margins in the year 2016 were -6.2%. Telecom Services industry average Net Margins in the same period were 6.9%
Sector and Industry Association of Sprint
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Sprint is associated with Telecommunications Sector and Telecom Services Industry.
Telecommunications sector is comprised of the following industries: Telecom Services; Communication Equipment. The definitions for each of the industries is as follows:
- Telecom Services industry includes providers of fixed-line and mobile telephone services.
- Communication Equipment industry includes providers of communication equipment to the telecom service providers. It also includes companies that own, operate, and lease mobile site towers to multiple wireless services providers.
Industry Ranking of Sprint
With $32.2 billion revenues, Sprint ranked number 4 of all the companies in the US Telecom Services industry. There were a total of 36 public companies in the US Telecom Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Telecom Services industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.