Sprint - Nextel 2013 Annual Report Download - page 29

Table of Contents
OVERVIEW
Business Strategies and Key Priorities
Sprint is a communications company offering a comprehensive range of wireless and wireline communications products and services that are
designed to meet the needs of individual consumers, businesses, government subscribers, and resellers. Unless the context otherwise requires, references to
"Sprint," "we," "us," "our" and the "Company" mean Sprint Corporation and its consolidated subsidiaries for all periods presented, inclusive of Successor and
Predecessor periods, and references to "Sprint Communications" are to Sprint Communications, Inc. and its consolidated subsidiaries. The communications
industry has and will continue to compete on the basis of the network quality, types of services and devices offered, and price. We are currently undergoing a
significant multi
- year program to upgrade our existing wireless communication network, including the decommissioning of our Nextel platform, which was
successfully shut
- down on June 30, 2013 (see "Overview - Network Modernization"). To support our business strategy and expected capital requirements, we
entered into a
$3.0 billion unsecured revolving bank credit facility and raised debt financing of approximately $9.0 billion in 2013. Additionally, we raised equity
funding of approximately $5.0 billion in 2013, including the conversion of the $3.1 billion convertible bond (Bond) Sprint Communications, Inc. issued to
Starburst II, Inc. (Starburst II), a wholly
- owned subsidiary of SoftBank, in 2012 and an additional $1.9 billion equity contribution provided by SoftBank in
connection with the SoftBank Merger defined below (see "Significant Transactions"). In 2012, we raised debt financing of approximately $8.9 billion in addition
to entering into a $1.0 billion secured equipment credit facility, which was fully drawn as of December 31, 2013 (see "Liquidity and Capital Resources").
Wireless segment earnings represented over 90% of our total consolidated segment earnings as of
December 31, 2013 . Within the Wireless segment,
postpaid wireless service revenue represents the most significant contributors to earnings and are driven not only by the number of postpaid subscribers to our
services, but also the average revenue per user (ARPU).
The following table shows the trend of our end of period postpaid subscribers by platform for the past five years.
On June 30, 2013, we completed the successful shut
- down of the Nextel platform. Despite the overall reduction in postpaid subscribers, primarily as a
result of our action to shut
- down the Nextel platform, we experienced growth in net operating revenue during the twelve month periods ended 2013 and 2012 as
compared to 2011, primarily as a result of the continued adoption of smartphones and the premium data add
- on charge. Prospectively, we expect to continue to
focus on profitable growth through service provided on an enhanced wireless network while continuing to achieve our key priorities.
Our business strategy is to be responsive to changing customer mobility demands by being innovative and differentiated in the marketplace. Our
future growth plans and strategy revolve around continuing to achieve the following three key priorities:
To simplify and improve the customer experience, we continue to offer Ready Now
SM
, which educates our subscribers on how to use their mobile
devices before they leave the store. For our business customers, we aim to increase their productivity by providing differentiated services that utilize the
advantages of combining wireline IP networks with wireless technology. This differentiation enables us to retain and acquire both wireline, wireless and
combined wireline
- wireless subscribers on our networks. We have also continued to focus on further improving
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Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
As of December 31,
2013
2012
2011
2010
2009
(in thousands)
Sprint platform
30,149
30,245
28,729
27,446
26,712
Nextel platform
—
1,632
4,285
5,666
7,255
Transactions
688
—
—
—
—
Total end of period postpaid subscribers
30,837
31,877
33,014
33,112
33,967
•
Improve the customer experience;
•
Strengthen our brands; and
•
Generate operating cash flow.