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SoftBank's Son Keeps Sprint on Short Leash

Sarah Thomas

SoftBank CEO Masayoshi Son wants to make it clear he won't be a hands-off investor in Sprint, and more employees might be shown the door -- or choose to find it on their own -- as he restructures the carrier to become more sales-driven.

In an internal memo obtained by Light Reading, a Sprint Corp. (NYSE: S) executive warned employees about changes due to be implemented during the coming months. The letter asks employees to stay focused on their work, support internal clients and colleagues, and remain frugal and cost conscious.

It reads:

    As we have all heard from [CEO Dan Hesse], our company will evolve into what can be best described as a sales-driven organizational company model. For this reason, some modifications need to be made to the current organizational structure and you will soon start to hear more about how and in what areas these changes will take place.

Hesse might be delivering the news, but the vision is clearly coming from Masayoshi Son, the driving force behind SoftBank Corp. 's acquisition of Sprint. (See Softbank Closes on Sprint Acquisition.)

He recently called on employees to join forces with "our Japanese unit and work as a single entity," and wrote in a post on the Nikkei Asian Review that he didn't want to repeat mistakes he made when running US companies Comdex and Ziff Davis, where he let American executives run those companies at their discretion.

That previous strategy was "based on my belief that Japanese owners should not interfere too much with the U.S. executives' business management," he wrote. "That belief was wrong."

Son said that by leaving American executives to their own devices he was acting as an investor and not a leader. His new plan to be hands-on means he has to sometimes yell at Sprint executives. As an example, he said he learned in a recent meeting that Sprint's advertising was not cost effective. Cue the yelling.

"This made me quite angry," he said. "Sprint spends a large amount of money on advertising every year, but its effects have been almost negligible. I directed the Sprint executives to terminate all existing contracts with the company's advertising agencies. We will shortly start from scratch on advertising, with new agents also making proposals."

The SoftBank boss clearly has big changes in mind for the struggling carrier, and that's already included big cuts. Sprint has had several rounds of layoffs related to the SoftBank takeover and also following Sprint's acquisition of Clearwire. Son said he plans to adopt the aggressive approach he did when he took over the Japanese arm of Vodafone Group plc (NYSE: VOD), which he called a "sinking ship" when he took over. (See Sprint Lays Off 800 Customer Service Reps and Sprint Axes More Clearwire Employees.)

As such, he admits he's also running the risk of forcing managers and employees to quit. At Vodafone, a third of executives left within six months. Sprint CEO Hesse, however, won't be among them as he's now on a five-year contract cycle with the company that won't come up for review before 2018. (See Sprint CEO Hesse to Stay On Through 2018.)

Son didn't go as far as to comment on the two biggest rumors circulating around Sprint -- that Softbank is planning to merge Sprint with T-Mobile US Inc. , as well as move its headquarters to California. But he made it clear Sprint will be seeing a lot more of him and the top-level Softbank execs, regardless of cultural and language barriers, as they work to reverse Sprint's status as a loser in the US. (See Report: SoftBank Preps $19B Bid for T-Mobile and Sprint: Heading to California?.)

"In the past, I would probably have told Japanese executives at SoftBank to focus on Japanese operations if their English was not at a high level," Son said. "Not anymore."

— Sarah Reedy, Senior Editor, Light Reading

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User Rank: Light Beer
1/26/2014 | 8:03:18 AM
Sprint is a Bully
I think Sprints biggest problem is how they treat thier customers. They bully them and they lie to them. Here is a whole article about it:http://mysprintexpierence.blogspot.com/2014/01/sprint-lies-and-bullies-customers.html


This is ridiculous and nobody should trust them in my opinion. They need to stop playing games and get their network to actually work. They only charge people $25 a month now....thats evidence that they know thier network is bad and that they are losing customers. In my opinion, Sprint is in HUGE trouble. I hope they go out of buiness quick. 
Sarah Thomas
Sarah Thomas,
User Rank: Blogger
1/24/2014 | 10:54:50 AM
Sprint layoffs confirmed
Sprint confirmed it will be laying off people today in an SEC filing: http://www.sec.gov/Archives/edgar/data/101830/000010183014000004/a8-k20140116.htm. Didn't say how many are being cut, but it will take a $1.65 million charge for doing so.
Sarah Thomas
Sarah Thomas,
User Rank: Blogger
1/24/2014 | 10:50:24 AM
Re: Repairable ?
If rebranding is necessary, that does bode well for T-Mobile. I agree that the name has been damaged. And, it looks like Sprint isn't going to try to bring back the Nextel name for the enterprise either, as rumored. Not sure if that would've been a good thing at this point anyway.
User Rank: Light Beer
1/22/2014 | 9:46:55 PM
Repairable ?
The question no longer is if Sprint has the capacity of deploying ,sustaining scalable spectrum while remaining profitable.

The real question is if the Brand is repairable by these advancement. 

My personal opinion: it's difficult to say. I think we've reached a point where rebranding is almost necessary . 

Although smaller, Tmobile has the momentum to drive that brand. I think this is what Mr Son is seeing into the future.

-8 year Sprint, Verizon Customer.
User Rank: Light Beer
1/22/2014 | 11:41:48 AM
Re: Son shining on Sprint
TMobile seems to be pretty stacked with wide amounts of spectrum to deploy LTE on, even if it is within the 1700/2100 AWS block.  The fact that they started with 10x10 deployments at the core, only to expand to 15x15, and 20x20 in markets where they have the assets can not be emphasizied enough.  That makes Sprint the only carrier, that initiated their LTE build out on 10Mhz spectrum (5x5 carrier), instead of 20Mhz (10x10 carrier) like the other big three.  This little known fact is the achillies heel of Sprint's Network Vision, and something I don't think you will see CEO Dan Hesse mentioning in any article anytime soon.
Sarah Thomas
Sarah Thomas,
User Rank: Blogger
1/22/2014 | 11:28:34 AM
Re: Son shining on Sprint
Well, you're definitely more educated on spectrum bands than most consumers. :) T-Mobile is working on deploying in 10x10 -- has it in 40+ of the top major cities, and is now doing 20x20 channels, but it's still early in the upgrade.

User Rank: Light Beer
1/22/2014 | 11:22:57 AM
Re: Son shining on Sprint
Yeah I have noticed their new campaign.  Its defaintely caught my interest.  But it still requires a new user to pay $400+ for a new phone that works on TMobile's bands.  Thats again, a hefty investment to switch carriers.  I am also not sure as to the technology stack that TMobile has deployed their LTE on, I believe its also one of the higher AWS frequencies in the 1700/2100 range.  To me that is not that different from Sprint's deployment on 1900 PCS.  These high frequencies means LTE signal strength fade's much more quickly indoors and within structures. 

I have already tested Sprint's against ATT/VZW's low freq 700Mhz networks, it doesn't even compare.  Step one foot down subway stairs, into elevator well, parking garage, office building bathroom, etc and your Sprint LTE connection is gone, but your ATT/VZW is strong and pumping.  Thats the difference between high and low LTE freq. 

I would also need to learn more about the Spectrum width of TMobile's LTE, last thing you want is to switch to TMobile only to find its also been deployed on the minimum 5x5 carrier like Sprint's.  Suseptible to traffic slow downs when subscriber volume and demand rises.
Sarah Thomas
Sarah Thomas,
User Rank: Blogger
1/22/2014 | 10:55:09 AM
Re: Son shining on Sprint
hmm So Clearwire racked up the charges for you, or someone stole your identity? Either way, hope you got your money back!
Sarah Thomas
Sarah Thomas,
User Rank: Blogger
1/22/2014 | 10:52:27 AM
Re: Son shining on Sprint
Well, T-Mobile will now pay any ETF, not just from AT&T switchers, so that's an option for you!
User Rank: Lightning
1/22/2014 | 4:01:05 AM
Re: Son shining on Sprint
I don't know where to cite, but Clearwire had a network in Nevada years ago. 

I could say that by chance, I had a previous phone number owned by Clearwire, and someone at UPS Global Services called me, and left me a nasty message saying I needed to personally pay a $250,000 UPS bill.  (this actually occured)  I asked what the invoce amounts for the last ten statements were from, and where the desnation was.

They provided them between somewhere in Shenzen China to Las Vegas. 

I said "Well, I can't pay that..."  The UPS collections agent then said "I can take a corporate credit card for the minimum amount of $25,000 and we can finance the rest."  

I said "Look, I don't recognize these charges.  I'll tell you what, please serve the company with proper legal paperwork; and take it to collections.  I'll let my legal team know.  If the charges are correct, we'll pay the full amount.  However, at this time, you should probably send this account to collections, and pursue all legal options because it seems all the charges are fraudulent.  I'm not going to perform business with UPS ever again!"

I'm sure John Stanton really enjoyed that.  He was douche #2 at McCaw Cellular (AT&T).
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