(Bloomberg) -- Sprint Corp. is getting enough traction in its turnaround that the wireless carrier might be able to compete on quality instead of cut-rate prices, Chief Executive Officer Marcelo Claure said, sending shares soaring.
While Sprint is in last place among the four biggest mobile-phone companies in the U.S., it's investing $3.5 billion this year to improve its network. That will make customers more likely to stay even if they have to pay a little more, Claure said on a conference call Friday.
In 12 to 18 months you will see Sprint offer fiber-like speeds with 5G, he said. “Competitors won't be able to do 5G speeds. We will offer new applications no one else can offer and there will be no reason to continue discounting. In the meantime, we will be the price leader with some modest price increases.”
The company advanced in its turnaround effort with a 10th consecutive quarter of phone-subscriber gains in the three months that ended in December. Sprint added 256,000 net postpaid subscribers on all devices in its fiscal third quarter. Analysts had estimated an increase of 234,000 on average.
Sprint shares jumped as much as 8 percent to $5.51. Through Thursday, the stock had fallen 13 percent this year despite parent company SoftBank Group Corp. purchasing shares to demonstrate support.
Bigger competitors T-Mobile US Inc., Verizon Communications Inc. and AT&T Inc. also added customers in the period, with holiday shoppers upgrading to the latest devices.
Sprint raised its fiscal year 2017 adjusted free cash-flow guidance to a range of $500 million to $700 million from around break-even.
The collapse of merger talks with T-Mobile US Inc. late last year left Sprint alone to face a very competitive wireless market. Michel Combes, who took over as chief financial officer this week, is cutting overhead costs while the company increases investments in its network to improve quality and capitalize on its industry-leading supply of airwaves.
To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net.
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Lisa Wolfson
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