(Reuters) - Sprint Corp (S.N) on Thursday appointed former Altice NV (ATCA.AS) CEO Michel Combes as chief financial officer, replacing Tarek Robbiati who had chalked out a turnaround plan for the telecom company that involved sweeping cost cuts.
Sprint’s shares were down 4.8 percent at $5.61 on Thursday morning on fears that Robbiati’s departure could derail the plan at a time when the company is spending heavily to launch its 5G network.
“We believe this feeds the narrative of concern that Sprint needs to spend on network and continue to aggressively cut costs,” Wells Fargo analyst Jennifer Fritzsche wrote in a note.
“Robbiati did a very impressive job as to what he was tasked to do - lower the company’s cost of capital,” she added.
Sprint has sought to strengthen its balance sheet by cutting costs and mortgaging a portion of its airwaves and equipment, but industry analysts have raised concerns about its $38 billion debt.
Combes’ sudden exit from Altice NV (ATCA.AS) last November also appeared to weigh on investors’ minds, but some analysts were upbeat given his more than 30 years of experience in the telecoms industry.
“While Combes’ abrupt departure from Altice last November will be a focal point for investors, it is important to note that Combes has extensive telecom experience including as CFO of Orange, CEO of Vodafone Europe and of Alcatel,” Morgan Stanley analyst Simon Flannery wrote in a note.
Combes, 55, was ousted from Altice NV as the company sought to reassure investors after its shares dropped 30 percent within a week. He had been brought to put Altice's ailing French mobile operator SFR back on track. (reut.rs/2lTOirC)
The appointment comes a month after Sprint struck a deal with Altice's U.S. business that will allow the U.S. telecom provider to use Altice's cable infrastructure to transmit cellular data and develop a 5G network. (reut.rs/2CsAkUR)
“(Combes) has strong Street credibility and comes to Sprint as the company is looking to turn the ship around in a choppy environment,” GBH Insights analyst Daniel Ives said.
He will also be appointed to Sprint’s board at a later date and will be responsible for leading the company’s financial operations, strategy and continued cost transformation, the wireless carrier said.
Sprint and T-Mobile recently called off their merger talks to create a stronger U.S. wireless company to rival market leaders, leaving Sprint to engineer a turnaround on its own.
Reporting by Laharee Chatterjee in Bengaluru and Anjali Athavaley in New York; Editing by Martina D'Couto and Saumyadeb Chakrabarty