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Sprint (S) Offers Cloud-Based Commercial Phone Service Omni

Zacks Equity Research

Sprint Corporation S recently unveiled a cloud-based commercial phone service dubbed Omni to primarily cater to medium and small-sized businesses (“SMBs”). Loaded with all the functionalities of a landline phone, Omni brings mobility to SMBs, offering an affordable access to modern, feature-rich, cloud-based phone services that are otherwise available to big-businesses and corporations.

Omni leverages the VoIP technology of Ooma — one of the premier VoIP service providers of the country. This is likely to enable Sprint to either bundle Omni with other compatible products and services or offer it as a standalone service.

Powered by a high-speed Internet connection, Omni facilitates business entities to screen and manage voice communications with features like a virtual receptionist for custom call answering and routing. It also offers custom recorded messages and virtual extensions for remote access to voicemails. Notably, a web portal eliminates the need for expensive IT services with simplified user management facilities, settings and call preferences.

Sprint is offering this service on a monthly basis without the binding of an official contract, with plans starting at a base price of $19.95 per month. The service is expected to be an instant hit with SMBs that often lack the financial resources of big corporate houses. The initial feedback has been quite encouraging. This, in turn, is likely to translate into incremental revenues for the company as it gears up for the blockbuster merger with T-Mobile US, Inc. TMUS.

Notably, the all-stock merger transaction has been cleared by the U.S. Department of Justice and Federal Communications Commission. The combined entity will likely help to accelerate the development of faster 5G wireless networks and ensure that the United States do not cede leadership on the technology to China. The companies expect the transaction to result in $6 billion of annual cost savings. The combined company, New T-Mobile, will have about 127 million customers. It will have a strong closing balance sheet and a fully-funded business plan, with a strong foundation of secured investment grade debt at close. It will be a force for positive change in the U.S. wireless, video and broadband industries. The new company will have the capacity to rapidly create a nationwide 5G network with the breadth and depth needed to enable U.S. firms and entrepreneurs to continue leading in the 5G era.

Sprint’s strategy of balancing growth and profitability, while increasing network investments and adding digital capabilities will likely drive its financial performance in the coming quarters. The company is continuously coming up with new ideas and solutions to help business enterprises improve their relations with employees and better serve customers. The launch of Omni is an endeavor in this regard.

Sprint currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the industry are Gogo Inc. GOGO and GCI Liberty, Inc. GLIBA, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Gogo delivered an average positive earnings surprise of 39.1% in the trailing four quarters, beating estimates on each occasion.

GCI Liberty is currently trading at a forward P/E of 6.5x.

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