Sprint CEO: Price Cuts First, Best Network Next
Sprint's new CEO Marcelo Claure is amped up to make the struggling carrier the next disruptor in the US wireless market, and his plan to do so starts next week with new, aggressive pricing plans.
Addressing a company-wide town hall call on Thursday, the new Sprint Corp. (NYSE: S) boss outlined his three priorities: reduce prices, improve the network, and decrease operational costs. Priority number one, price reductions, starts as soon as next week, he said. (See Sprint, T-Mobile: The Price War's On.)
"We're going to change our plans to make sure they are simple and attractive and make sure every customer in America thinks twice about signing up to a competitor," he said, adding that "very disruptive" rate places are coming next week, and Sprint will react quickly to bring competitive offers to potential customers.
"When you have a great network, you donít have to compete on price," the Brightstar Corp. founder added. "When your network is behind, unfortunately you have to compete on value and price."
Claure didn't elaborate on what the new pricing structures would be, but said that on the day they go live, he wanted dealers knocking on doors and hitting the ground running with selling, and he promised they would have the tools to back them up, something they lacked in the past.
In what was a well-received talk, Claure promised to have frank, two-way honest conversations with his new employees, even giving out his direct email address and assuring he'd answer everyone who wrote.
True to form, most of his talk today was centered on delivering the cold, hard truth. He admitted that the network rip-and-replace took too long, social media chatter about Sprint is largely negative, the carrier failed to react to competitive moves, and retail employees have had a hard time communicating the value of Framily, Sprint's version of a family plan.
On the plus side, he said Sprint has a tremendous value in its spectrum holdings and great employees, and he pointed out, no one stays a leader in this industry for 20 years, citing BlackBerry and Nokia as examples. He's confident Sprint can challenge AT&T Inc. (NYSE: T) and Verizon Wireless , but realistic that it will take a long time.
That's why phase two is crucial. Once its new price plans are in place, Claure said Sprint's second phase would be to leverage its spectrum and become America's best network. "I want to make sure we're the incumbent challenger," he said. "We don't want the status quo."
When asked about job cuts stemming from phase three, having the lowest cost to serve, Claure acknowledged they are inevitable, but said he did not yet know to what extent. He said he would make a list of "must haves" and "nice to haves" within the organization, and re-evaluate anything that falls in the later category. (See Sprint's New Boss Plans Cost Cuts and Sprint Lays Off 800 Customer Service Reps.)
Claure also acknowledged that he and SoftBank Corp. CEO Masayoshi Son "spent days and nights talking about the merger I'm not supposed to talk about," and ultimately decided it was not the right thing to do at the same as deciding Claure should replace Hesse as CEO. He complimented T-Mobile US Inc. on its success in disrupting the market, but is clearly more concerned about taking on the big two rather then warding off its still smaller competitor's advances. (See Hesse Out, Claure In: Sprint Is Son's House Now!, A Short History of Hesse, T-Mob's Legere Unleashed: 'Total Chaos at Sprint', and DT Wants Spectrum Favors; Legere Wants Sprint's Slot.)
So this was day four on the job for Claure. Want to know what he did on day one? Meet with Apple Inc. (Nasdaq: AAPL) CEO Tim Cook, he said, because "Apple will become a crucial part of Sprint." (See iPhone 5: Which 4G Carrier to Pick?)
And, if today's pep talk wasn't enough to motivate Sprint employees to achieve his simple goal of bringing in more customers than they lost, Claure promised -- to wild applause -- he'd fly in his business partner David Beckham when that's achieved. That's one way to win over your new employees...
— Sarah Reedy, Senior Editor, Light Reading