He's the brand new CEO in town and he has a brand new plan to cut costs to help Sprint compete against rival wireless carriers in what is becoming a cutthroat marketplace. Just days after Sprint’s parent company Softbank decided to drop the T-Mobile acquisition bid, recently installed chief Marcelo Claure vowed to “compete aggressively” for new customers.
“In the short term, our success will come from our focus on becoming extremely cost efficient and competing aggressively in the marketplace,” Claure said yesterday in a memo obtained by Bloomberg News. “The management team has been working closely with the board to outline the future strategy of the company.”
Can Claure Pull It Off?
Claure seems to have the credentials to get the job done. He founded Brightstar in 1997 and has grown the company from a small Miami, Florida-based distributor into a global communications business that posted $10.5 billion in gross revenue in 2013. Sprint’s hopes are high with Claure holding the reins. World Economic Forum selected Claure as a Young Global Leader, and he has received several Entrepreneur of the Year and CEO of the year awards. Claure joined Sprint's board of directors in January.
“During my time on the board, I was exposed to Sprint’s great history of success and innovation,” Claure said in the memo. “This time also provided me with deep insight into some of the challenges and opportunities we have ahead of us -- and some of them are significant. The good news is we have already started working on them.”
The Kansas City Star published Claure’s letter to employees in its entirety. It reveals that he has been working with the board to outline the future strategy of the company for months and will reveal more of his plans on Aug. 14.
“You have probably seen the many media reports speculating about Sprint’s future,” he wrote. “As I have already said, consolidating makes sense in the long-term but, for now, we will focus on growing and repositioning Sprint.”
Amid plenty of market speculation, Claure ended the letter on a positive note, sharing that he has learned an important lesson about two types of people: Those who dream, but let the dream go and those who dream and do the work to achieve their dreams.
“There has never been a better or more fascinating time to be in the wireless industry,” Claure said. “If we innovate and work hard together, I have every confidence that we will make Sprint the carrier of choice in the U.S.”
What To Cut?
We caught up with Jeff Kagan, an independent technology analyst, to get his thoughts on the letter. He told us cutting costs sounds like a smart move -- as long as Sprint is careful what it cuts.
“There are plenty of important areas that cannot be cut if they want to see their business grow. However, there are probably lots of areas that can be cut,” Kagan said. “Making the right choices is vital.”
Kagan pointed out that former Sprint CEO Dan Hesse also employed a cost-cutting strategy as part of his turnaround efforts for the company. As he sees it, Claure needs to go in with a scalpel rather than a machete.
“The new CEO wants to transform Sprint and this is the first step. Let's hope they get it right,” Kagan said. “The company, workers, shareholders and customers are counting on Claure. We all wish him and Sprint success in growing the company.”
Posted: 2014-08-14 @ 11:27am PT
"A PRICE WAR" Why these carriers wait unto another have better prices? The point is for some time in my city Sprint has lied about this 4g active in my area.Its not! 3g here only works and it is slow.I wonder,maybe Verizon,At&t will always have them beat.The service at Sprint is terrible,from tech to rep.They need more training in their game,not seasoned.
Posted: 2014-08-14 @ 11:04am PT
Everything in this article has alresdy been repeated. Tell us something new, please
Posted: 2014-08-14 @ 10:46am PT
Cutting Costs...Okay so that means increased hold times in customer service, no more network upgrades so lousy cell coverage and more incompetent Sprint store personnel.