Sprint Nextel Corp.
) is offering an array of customized services for its enterprise
customers through the enhanced cloud-enabled
) Office 365. The company has various service plans under Office
365 that offer the flexibility to choose individual products or
bundled tools in a single billing system.
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In addition, the company introduced two new product versions of
Microsoft Office 365, namely, Sprint Professional Plus with
Office 365 and Sprint Preferred with Office 365. Professional
Plus with Office 365 would provide the existing cloud-based
services included in Microsoft Office 365 apart from the download
version of Office 2013 known as Office 365 ProPlus. Preferred
with Office 365 include products like Active Directory and IT
policy management services along with Office 365 ProPlus.
We believe that the company's move to enhance its enterprise
product platform by offering enhancements is part of its Network
Vision strategy to expand core Sprint platform. The company is
already increasing penetration of smartphones, iPhones in
particular, and introducing data plans to accelerate post-paid
wireless subscriber growth. Further, incorporating new products
from the Microsoft Office 365 family to the Sprint portfolio is
expected to generate additional synergies by increasing
As part of the Network Vision strategy, the company launched LTE
services in five major markets in Jul 2012. In 2013, the company
expects to have LTE coverage for approximately 200 million
customers and 170 additional markets, depending upon backhaul
availability. Sprint has already completed the 29,000 cell sites
and leased 27,000 cell sites at the end of 2012. The Network
Vision strategy is expected to result in the efficient use of
capital, reduction of cell sites, elimination of dual networks,
backhaul efficiencies, reduced churn, lower roaming charges and
energy cost savings. Hence, the through this program the company
is expected to generate $10 billion to $11 billion in savings
over the next seven years (2011-2017).
Nevertheless, increased competition from top carriers like
Verizon Communications Inc.
), heavy investments, lofty iPhone subsidies and continued
wireline margin erosion keep us on the sidelines. In addition, we
also remain cautious about the Sprint, SoftBank and Clearwire
Corporation deal, which might face opposition from rival
companies as it will result in concentration of spectrum.
Sprint has a Zacks Rank #3 (Hold).