Out with the old (merger plans). In with the new (CEO). Sprint appears to be cutting its losses in hopes of a brighter future.
Sprint and Softbank, its corporate parent, have stopped pursuing the T-Mobile acquisition after coming to grips with the reality that antitrust regulators would ultimately veto the merger, the New York Times reported.
Meanwhile, Sprint named Marcelo Claure as the company’s next president and CEO. He replaces Dan Hesse, who has served as CEO since 2007. The founder and CEO of Brightstar Corp., a subsidiary of SoftBank, Claure joined Sprint's board of directors in January.
Why Sprint Cut Bait
We caught up with Jeff Kagan, an independent technology industry analyst, to get his thoughts on the happenings at Sprint. He told us we should look at this as the end of one chapter and the beginning of the next at Sprint. Just as with any good novel, he said, there are always twists and turns and nobody knows what’s coming next.
“Sprint walking away from this T-Mobile merger was what regulators wanted. Regulators want four wireless carriers,” Kagan said. “That’s the same argument they made when AT&T tried to acquire T-Mobile a few years ago.”
As Kagan sees it, Sprint is in a strong position as it starts its next chapter. The company has a new high-speed network, he said, and Claure is likely to introduce new growth strategies. Kagan figures the new Sprint may look very different than the old Sprint as new plans unfold.
Meet Sprint’s New Chief
Claure founded Brightstar in 1997 and has grown the company from a small Miami, Florida-based distributor into a global 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.
“Marcelo is a successful entrepreneur who transformed a start-up into a global telecommunications company. He has the management experience, passion and drive to create the strongest network and offer the best products and services in the wireless industry,” said Sprint Chairman Masayoshi Son. “While we continue to believe industry consolidation will enhance competitiveness and benefit customers, our focus moving forward will be on making Sprint the most successful carrier.”
Remembering Hesse’s Heroics
Kagan said he thinks Claure is the right man to take Sprint through its next growth wave and anticipates the company may grow in new areas under his leadership. He pointed to how much the wireless industry has changed over the past 10 years. The last decade has seen Apple’s iPhone, Google’s Android and Samsung’s Galaxy line up come to market. Sprint could make an impact in the next decade.
“Dan Hesse, current CEO of Sprint has done a remarkable job since arriving in 2007. Sprint was crashing and burning and Hesse saved the company. He also led Sprint through the network rebuild during the last year or so,” Kagan said.
"Now that the network rebuild is nearing completion, Hesse can be credited with a heroic rebuild. He gave Sprint the strength to move ahead and prepare for the next chapter. Now it’s up to Marcelo Claure and Masayoshi Son to set Sprint on the next growth wave. Is this Sprint and T-Mobile merger off forever? No. But it is off for the foreseeable future," he added.