New Sprint (S) CEO Marcelo Claure spoke with David Faber of CNBC on the “Squawk on the Street” show this morning. It was a very good and eye-opening interview on the thinking of the new Sprint CEO and the new path he will be taking going forward to rebuild Sprint.
Over the last decade we have watched Sprint struggle. Early on they burned through several CEO’s. Then they hire hired Dan Hesse as CEO who managed to save and stabilize the company. Growth however was another challenge. A year ago Softbank acquired the majority of Sprint and poured lots of money to speed up the network re-build.
Now Marcelo Claure is the new CEO as we turn the page and start the next chapter of the Sprint story. Not only are there big changes at Sprint, but there are also big changes at Sprint’s competitors and in fact the entire industry.
There are many new CEO’s leading the wireless industry into a new frontier. Many expect this next chapter to be a much more competitive and noisy place than wireless has ever been. A real battleground.
There are new CEO’s at AT&T Mobility (T) , T-Mobile (TMUS) and Sprint. I believe that means the competitive playing field will get much noisier as carrier’s battle each other for customers and market share.
Remember over the last several years, many carriers were more interested in signing up new smartphone customers than winning existing customers from each other.
Things are changing. Now there are fewer new smartphone customer signups so carriers are competing with each other. They are stressing speed, quality, reliability, network reach and customer satisfaction to win customers from other carriers who are not as satisfied.
This is good for the customer. And it is a new challenge and opportunity for the carriers. Things are changing and will be very different going forward.
This is the new world that Marcelo Claure and Sprint will be competing in.
I like what I hear about the new Sprint from Claure. They are saying and doing the right things. They are now the low cost leader in the marketplace today. They are offering deals to individuals, families and businesses at a much lower cost than the competition.
This was the position that T-Mobile started a year ago and they have grown since. Remember T-Mobile was crashing and burning themselves. T-Mobile CEO John Legere says last month, August, was their best month ever, signing up more customers than any other month. That shows T-Mobile seems to have found their slice of the pie and are signing up customers.
Sprint is next. They must first find their slice of the pie and start signing up customers at that same rapid clip.
Claure said today that this is a game of watching customer’s ads and losses. He said Sprint had more losses in recent years. However he also said that since he took over at Sprint it has suddenly won more customers than it has lost. It’s only been a few weeks, but it’s a good start.
If Sprint can keep that up and build they can recover pretty rapidly as well. It is impossible to tell what any company will look like going forward, but over the last year I have been saying that both T-Mobile and Sprint would start their recovery and we would have four, strong and growing competitors to choose from.
T-Mobile started their recovery a year ago and continues to grow and to build. They have found their slice of the pie and many expect this to continue.
Now it’s Sprints turn. I expect Sprint to recover just as quickly over the next year.
The next question is, as Sprint continues to win new business and grow, who will they win customers from? Will Sprint customers come from T-Mobile or will they come from smaller players like US Cellular, C Spire Wireless and Tracfone.
I don’t see wins coming from larger players like AT&T Mobility and Verizon Wireless (VZ) at this stage. Ralph de la Vega of AT&T was also on CNBC yesterday saying how their churn rates are the lowest ever. I think we can expect that to continue.
So there are still questions. We’ll have to watch this new game unfold, one step at a time. First, Sprint has to identify the slice of the pie they want to focus on, then they have to start winning business week after week, month after month, quarter after quarter. Then their path will become clearer for us to understand.
So far I like what I am hearing from Claure. Let’s hope their early success continues to help Sprint recover and grow once again. It sure would be great if the US marketplace had four, strong and growing competitors, wouldn’t it!