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Sprint Plays by Its Own Rules, Too

Sarah Thomas
11/4/2013

When it comes to innovation, Sprint appears to be taking a cue from some of the European operators and distancing itself from its network operator parent in order to see what it can come up with on its own.

The third largest US operator, however, is taking a more measured approach than European operators like Telefónica SA (NYSE: TEF) and Orange (NYSE: FTE), both of which spun off entirely separate companies for innovation. It's starting with mobile ads and monetization first, and it's all staying within Sprint Corp. (NYSE: S)'s four walls, but keeping a healthy distance. (See Telefónica: Digital Dreamer? and Innovation Makes Life Better for Orange.)

The division is called Pinsight Media+, and it was first launched a year ago to sell aggregated customer data to third parties. Since then, the carrier has announced a partnership with Telefónica SA (NYSE: TEF) to expand its ad network globally and acquired mobile app and ad company Handmark/OneLouder in April. (See Sprint, Telefonica Forge Ads Alliance and Sprint Buys Mobile App-Maker Handmark.)

Just last month it introduced both Pinsight Touch, a way for brands to integrate NFC into their mobile apps. It also partnered with Millennial Media to expand the reach of that company's ads on Sprint devices. (See Big Data Attracts Big Dollars, New Faces.)

Kevin McGinnis, VP of Sprint's Pinsight Media+, describes the unit as a lean startup within Sprint with the autonomy to build products in a quick manner and change paths quickly. The goal is to put things in front of its customers to see what works, rather than take months developing new services that they presume customer will want.

"One of the reasons we wanted to get this outside the walls of the big corporation is we don’t have enough revenue today to be relevant to a company generating $30 billion per year," McGinnis said. "We had to get our own P&L and make it big enough to matter to our board of directors."

It isn’t big enough today, he added, but the Sprint big-wigs' eyes are on it. Right now the organization is focused intently on its advertising and big data goals, in large part because of its constrained and defined P&L. But when Sprint explores new services, this will be their first stop. McGinnis's boss, Mike Cooley, runs Pinsight Media+, and also serves as VP of new ventures at Sprint. So, as emerging opportunities come to light, he'll be the one deciding how to take them to market.

An example McGinnis cited was healthcare. It's the same architecture for data ingestion and the same framework for understanding context and relevance, just with different analytics. It'd fit into the Pinsight strategy, he said.

"Premium services was always the ugly stepchild in mobile because our core business is access," McGinnis said. "It's the first time we've pushed it out and created a standalone business unit. We're extremely focused on making that successful now."

— Sarah Reedy, Senior Editor, Light Reading

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MordyK
MordyK
11/4/2013 | 11:43:09 AM
Re: Solid strategy
Its an approach that works well for carriers in their current state, seeing how these are really in a sense "waste products" by which I mean products that effectively use an entire dump of the carrier's service dataset for new services.

However separating them also has drawbacks as it makes changes to the network that can add significant value in its own right ard to achieve.

I was watching a video of a presentation made by KDDI - which while a bit blurry - showed what you can do when innovation is a team effort throughout the company.

Some examples:

Soratena is a service where KDDI installed weather monitors on 200+ cell sites. This allows them to 1. provide accurate real-time weather data to third parties. 2. improve targeting on their ad platform with the addition of an accurate hyperlocal weather variable. A fringe benefit is that the network side could theoretically adjust the towers configuration to compensate for any degradation of service caused by various weather patterns. 

Cost to them =0 profit is whatever they make from it.

Another example is their integration of WiFi as a means to help retailers interact with their customers based on their location.

Again the cost for this is zero as the merchant bears the entire burden, but KDDI gets immense value by being the service provider and having access to all the data, which they can in turn use for whatever opportunities they or others see value in.
Sarah Thomas
Sarah Thomas
11/4/2013 | 9:55:31 AM
Sprint & Jibe
Btw, not every new services venture comes from this division. For example, Sprint's recent partnership with Jibe Mobile didn't. Seems like they could've done a lot more with there than just co-market a white-labeled app though, so maybe it should've been developed separate from traditional telco processes...

http://www.lightreading.com/mobile/volte-rich-communications/sprint-jibes-with-ott-comms/d/d-id/706055
Sarah Thomas
Sarah Thomas
11/4/2013 | 9:53:18 AM
Solid strategy
I think this struture makes sense for most operators, but especially Sprint as the company has its hands full with Network Vision. That is job number one, and it's a big one, so it's smart to move more enterprising service ventures into a somewhat separate "lean start up" division.
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