Sprint Getting to Work

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Mobile


Now that the distraction of a merger is over, Sprint’s new CEO Marcelo Claure will need to work fast to repair the third-largest U.S. wireless carrier, which watched 20 percent of its value disappear this morning following news of it abandoning its bid for T-Mobile.

Over the next few weeks, Claure will roll up his sleeves and start cracking on a few things to fix what his boss, Masayoshi Son, has called Sprint’s “loser” mentality.

We thought we’d give him a hand. Here are four things Claure needs to tackle immediately:

  • Cut the price of service. Sprint has been losing customers — 220,000 in the June quarter alone — because the “Framily” plan it introduced in January is simply more expensive than the competition. The outgoing CEO, Dan Hesse, acknowledged the carrier was already testing pricing options, and told investors during a recent earnings call, “We may need to make some adjustment to our pricing levels based on what we learn.”
  • Stop the bleeding. The company has been shedding subscribers, as other carriers make gains at its expense. Sprint had been blaming its troubles on disruptions caused by an ambitious infrastructure upgrade, in which it was ripping up and replacing older networks. But now that this work is mostly complete, it’s time to focus on attracting — and holding onto — customers.
  • Convince Chairman Masayoshi Son to break out the checkbook. Sprint will need to continue to make network investments if it hopes to keep pace with larger rivals such as Verizon and AT&T. The stakes are high. Verizon Wireless CEO Daniel S. Mead estimated the industry invests something on the order of $35 billion a year on infrastructure — his own company spends around $16 billion annually. Sprint will have to fork over billions just to keep pace. Sprint said Claure’s “first priority” will be to continue the build-out of Sprint’s network.
  • Get other costs under control. The company has lost money every year for the past five years, following its merger with Nextel. Sprint posted a modest one cent per share profit in its recent quarter, thanks to lower expenses. Claure pledged to keep the company moving in this direction, noting, in a statement, “We will focus on becoming extremely cost-efficient and competing aggressively in the marketplace.”


3 comments
AirShark
AirShark

Sprint and Tmobile can't compete on the economic scale enjoyed by V and ATT.  That's why they were trying to merge.


We can't complain about the reduction in market competition one day and then literally the next day after that is put to bed, scream that the smaller two carriers need to dump buckets and truckloads into their networks to compete "NOW!!!."


The regulators stopped the merger.  Two smaller carriers is what they want and is what we're now getting.

mknopp
mknopp

KISS:

It is all about coverage, price, and service. In basically that order.

We used to be Sprint customers, but a while back we moved to a town about 20 miles away. While our Sprint coverage in our old city was fine. Coverage in our new home was spotty at best, and I do mean in our home. Coverage in the new town was even more spotty.

We looked at T-Mobile and even started service with them. Service in our new town was great. Then we go to visit my parents. There was zero service at their house. None, not even roaming.

So, we opted out of T-Mobile during the grace period.

This left AT&T and Verizon. Both had decent to good coverage in our new stomping ground. AT&T won because they were cheaper.

Customer service is great, but really only comes in if there is a problem.

 The simply fact is that for a large portion of the country Sprint and T-Mobile aren't even options because service is either non-existent or spotty. And no matter how cheap a plan is it is too expensive if there is no service.


Sprint, needs to build out. They need to cover more of the map.

jeffcarp
jeffcarp

I think you missed the mark on this article. What has carried the Uncarrier is their marketing message and brand excitement generated by their CEO.  There isn't a lot of substance behind it. T-Mobile cannot compete with Sprint from a network coverage or spectrum holding position.  And when the CCA alliance gets fully fire up with Sprint then T-Mobile will be in an even more disadvantageous coverage situation.  Sprint needs an imaginative message to explain to people what their new network is all about.  Sprint does not need to immediately lower prices.  As T-Mobile's quarterly earnings are proving, being the Uncarrier is not exactly impacting margins very well.  It is a gimmick that isn't sustainable. 


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