Something very interesting, maybe even a bit frightening is going on at Sprint (S). After the merger attempt with T-Mobile (TMUS) failed, all of a sudden, executives are leaving. To make matters worse, I would assume this will continue. We may see more executives leaving and in fact regular employees as well. Why? The reason is simple.
After Sprint was acquired by Softbank (SFTBY) several years ago, the fear was many workers would leave. To keep key employees in place, executives and workers were given a promise of wealth if they would stick around and keep the company humming and growing until some point in the future. These promises could be also redeemed after certain conditions were met. Conditions like a merger.
That’s why Sprint executives and workers were so exciting about the potential merger with T-Mobile. They saw this as a big payday. Actually, they would be excited about a merger with any company who would want to take them over. It would mean green to them.
Executives and Workers Re-Evaluate Sticking with Sprint
Now that the T-Mobile merger attempt is off, executives and workers both have the chance to re-evaluate their personal position. Many are sticking around. However, many are leaving. That’s what this next wave is all about for Sprint. I see this as the beginning of what may be several weeks and even months of changes for the company.
Will Sprint offer more incentives to stick around? They should consider something like this in order to hang onto talent. The reason is simple. Going forward, they are a stand-alone company. And stand-alone companies need to have a full complement of executives and workers to keep new ideas and performance at full throttle.
Next for Sprint after T-Mobile Merger Collapse
So, what’s next for Sprint? This exodus could be short-term and limited or it could be extensive and last a while. It could make little impact, or it could be harmful to Sprint growth. It’s obviously too early to tell today. However, this is the time for Sprint to wave their magic wand and keep workers and executives where they are.
Sprint is a good company with good executives and good workers. With that said, either way, losing key executives and workers does not point to growth. So, if we are not looking at growth in the near future, what can we expect?
Don’t rule out another merger attempt with another company. This is what Masayoshi Son wants. So, this should always be on everyone’s mind. There are plenty of companies who could be interested. Many companies getting into the wireless business using the MVNO method. Look at the cable television industry as one example.
Marketing always plays an incredibly important part of any company. Advertising, public relations and everything marketing will be especially important going forward. Rumor has it that Sprint has spent a fortune on their service promotions which have attracted customers. They say Sprint can’t keep up this pace.
I disagree. I think as long as Sprint is in its current situation, promotions and savings for customers are essential. I think they should do everything in their power to encourage good customer satisfaction.
Heck, we’ve been saying the same thing about T-Mobile over the last several years as well, yet they continue on the same path and continue to grow. Why can’t Sprint follow this T-Mobile model for as long as they need to?
While there is no way to tell what Sprint will look like in the months ahead, now is an important inflection point. I hope they do the right thing and hang onto important people. Letting them slip away could be very costly to the company going forward.
Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at [email protected]. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.
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