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How Claure can fix Sprint as it battles T-Mobile

Matt Hamblen | Aug. 11, 2014
What can incoming Sprint CEO Marcelo Claure do to reverse the carrier's declining subscriber base?

"Sprint has to finish its LTE rollout and make it bigger than T-Mobile," he said.

Further down the line, Sprint has to take advantage of its rich spectrum holdings to expand its coverage, Entner said.

"Sprint has the best spectrum position of all the national carriers, with more than two times the amount that T-Mobile or Verizon or AT&T have," he said. "Claure's sitting pretty on spectrum."

That doesn't mean Sprint and T-Mobile both can't benefit from purchasing low frequency spectrum in the coming spectrum auction at the Federal Communications Commission, he added.

"Even with the best range of spectrum, Sprint is a laggard on network speeds," Entner said. "Claure has to differentiate on data download speeds. He has to bring the Sprint assets to bear and become the leader in mobile data."

A recent RootMetrics study of wireless network performance for speed and reliability of connections in 125 U.S. cities in the first six months of 2014 put Sprint last, behind even T-Mobile. Sprint didn't receive a first place finish in any of the 125 cities studied, while Verizon was first or tied for first in 115 cities.

Meanwhile, T-Mobile tied for first in 22 of the 125 cities with either Verizon or AT&T or both.

Bolstering the Sprint network beyond its current LTE upgrades will be costly, but it's something the carrier must do, analysts said. Sprint's transition to LTE was too slow, perhaps because it invested so much time and money into what MacGillivray called the "misstep" of WiMax.

Network upgrades will be important to Sprint's consumer and business customers, and MacGillivray noted that the carrier could also find advantages by adding services for small- and mid-size businesses. Such services could include innovative offerings for managing costs, devices and users.

Sprint's marketing and persona must be improved

In recent months, T-Mobile CEO Legere has come across as a bull in a china shop, with brash, even obscene comments at news conferences and in tweets. He described T-Mobile as the "un-carrier" that will do away with many traditional contracts and offer lower costs.

By contrast, Hesse has been seen as almost humble, pursuing a quiet strategy of increasing Sprint's cash holdings and managing its combination with SoftBank.

"Sprint needs a strong leader who can position the Sprint workforce with a mentality that they are in the game to win share, exceed customer expectations and do things a little differently," MacGillivray said.

Even though SoftBank purchased a majority of Sprint more than a year ago, Sprint hasn't adopted SoftBank's "market disruptor mentality," she said. While SoftBank describes itself as a "'mobile Internet company,' why doesn't Sprint do the same and leverage some of the assets and experience from SoftBank's success in Japan?"

 

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