Sprint's Moment of Truth
If the Sprint recovery has now begun, I expect that when we see the first numbers next quarter, we will see customers coming from T-Mobile, U.S. Cellular and C Spire. Price-sensitive customers who also want more data and a faster wireless data network will be drawn to Sprint. If Sprint is successful at taking their business away, though, we will see the other carriers respond competitively.
08/21/14 5:00 AM PT
The good news for Sprint is the stars seem to be lining up for a recovery. Change is occurring throughout the entire wireless industry. Every player -- including AT&T Mobility, Verizon Wireless, Sprint, T-Mobile, U.S. Cellular and C Spire Wireless -- is changing. We will start to see lots of new services, pricing, competition and marketing going forward.
In the middle of that ruckus, Sprint has reached what may be considered its turnaround moment. Every change happens in an instant, but it takes some time before it's recognized. It may take a quarter or two to show up in the numbers, but Sprint's change may be happening right now, as you read this.
Of course, Sprint needs to continue moving ahead and growing, but if it does, we will look back at this time as Sprint's turnaround moment.
Hesse Out, Claure In
T-Mobile was crashing and burning -- worse than Sprint -- for many years. It got a new CEO and a new strategy a year and a half ago, and it has been growing since then. Today, T-Mobile's success is being celebrated by many of its users.
That same rapid recovery could happen at Sprint -- and could be starting right now.
A Sprint recovery actually could happen even more quickly than T-Mobile's. Sprint's network upgrade is almost complete. It has a new owner in Masayoshi Son and a new CEO in Marcelo Claure. It has just launched the first of what may be many service offerings with lower prices and more capacity.
Sprint last week replaced CEO Dan Hesse with Marcelo Claure. Hesse saved Sprint from certain disaster when he joined the company six years ago. He spent time, energy and money fixing its problems and preparing for the future.
Over the last year or two, customers have noticed the improvement. That's the good news. However, growth was harder to reignite.
Softbank last year acquired Sprint, and CEO Masayoshi Son poured money into rebuilding its network. Son and Hesse promised wireless greatness at every opportunity.
Then Marcelo Claure took over as Sprint CEO, and apparently he's been very busy. He not only took the ALS water bucket challenge with good spirit, but also announced Sprint's first new service plan, which could become very successful.
Lower Prices With a Bonus
The Sprint Family Share Pack takes a popular industry-wide idea and tweaks it with a lower price tag and double the data. That makes it very enticing for a segment of the user base.
Sprint previously had a plan similar to AT&T, Verizon and T-Mobile in price and data. This new plan is the same basic idea, but it costs less and has double the data.
I think this will be very attractive to a slice of Sprint's customer base. It could be the start of the Sprint turnaround.
There are several reasons customers choose to buy from one carrier or another, but customers don't place their priorities in the same order. The main factors in decision making are reach, quality, speed and price. Some customers put price first, while others put quality first. Still others put speed first, and others put network reach first.
Typically the item first on a customer's list determines the choice of one carrier or another.
If Sprint Gains, Who Loses?
The first wave of Sprint's success likely will come from winning customers from companies like T-Mobile, U.S. Cellular and C Spire. Like Sprint, these companies offer lower-priced plans than those of AT&T and Verizon.
The customer segment that puts price first may be attracted to Sprint by the promise of more data and a newer and faster network. Capturing this slice of the customer pie could help Sprint start building its recovery.
So, if the Sprint recovery has now begun, I expect that when we see the first numbers over the course of the next quarter, we will see customers coming from T-Mobile, U.S. Cellular and C Spire. Price-sensitive customers who also want more data and a faster wireless data network will be drawn to Sprint.
If Sprint is successful at taking their business away, though, we will see the other carriers respond competitively. Game on.
Sprint's wireless data network transformation is near completion. I expect to see much more from Masayoshi Son and Marcelo Claure in the coming weeks, months and quarters.
We may be seeing the early stages of what may be remembered in years to come as the Sprint comeback -- so stay tuned. It sure would be good if the wireless industry were full of successful players once again, wouldn't it?