You’ve got to love it when an entrepreneur runs a public company. When Marcelo Claure became CEO at Sprint last year, he may not have understood all the work ahead of him. However, he is attacking it like a true entrepreneur. Every company has ups and downs, and Sprint is no exception. During the last decade – starting with the Nextel acquisition – Sprint fell off the growth track and struggled. The company needed to be reinvented on the services, innovation and brand awareness sides. It also needed to increase earnings and decrease costs. So let’s take a look at how they are doing so far.
Remember, Sprint is under new management after being majority acquired a couple of years ago by Japanese company SoftBank. Last summer Softbank CEO Masayoshi Son brought in Marcelo Claure as new CEO of Sprint. Claure was CEO of Brightstar, which he built from the ground up.
During the last year under Claure, Sprint has been showing vibrant new thinking. It started introducing new ideas and services into the marketplace, which have so far been successful. The company is also moving on serious cost-cutting efforts.
Recovery not overnight proposition
I have been following Sprint and all its competitors for quite a long time. I have seen plenty of ups and downs over that time. I think as long as the right decisions are made around both growth and cost-cutting, the Sprint recovery should continue.
Recovery is not an overnight proposition, it takes time and effort. However, we can see Claure working, step-by-step, to turn Sprint around. Making the right choices along the way is key – what new services to introduce and what cuts to make.
The right moves can help accelerate a turnaround, just as the wrong moves can hinder a turnaround. So making the right moves, offering the right new products and cutting the right costs are all key. The challenge is to strengthen the company without removing value to the customer and the investor.
Winners and losers
Turnarounds are not easy and they are not quick. We have seen many companies both succeed and fail. Some recoveries last and others are only short term. Staying on the right path and making the right moves is always of the utmost importance.
For example, T-Mobile US has been on a successful path during the last few years. It has shown early signs of recovery. It was crashing and burning. Then, under new leadership and new ideas, it began a recovery, which takes time. However, it seems to be heading in the right direction.
Another example: Motorola was once a leader in the wireless handset space, but lost its way in the late 1990’s when it was replaced by Nokia and BlackBerry. While it made a temporary comeback several years later with the Razr, that recovery didn’t last. Several years later, both Nokia and BlackBerry lost their lead to Apple iPhone and Google Android and have not shown recovery.
Sprint recovery on track
As for Sprint, while there are no long-term guarantees, I think investors, customers and workers must be pleased with what they see so far from Claure. The carrier seems to be on the right track but it is still very early in the recovery process – it will take time and work.
Claure enjoyed building Brightstar. However, he must consider this Sprint challenge on an entirely different level. It’s like being a successful golfer at your local club, then suddenly playing with the masters at The Masters. The lessons he learned in the past will let him take a fresh approach to the wireless opportunity. He is learning how running a larger company like Sprint differs from a smaller company like Brightstar. However his outsider approach and vision may bring just the new kind of mix that Sprint needs going forward.
Winning is infectious
The good news is Claure likes to win and that is infectious to the entire organization. As I talk with Sprint workers I sense a renewed capacity and excitement. If this is true, then the next several years of recovery should transform Sprint into a vibrant and growing company once again.
Sprint has a strong amount of wireless spectrum, which puts it in a very good competitive position. So rather than investing billions of dollars to acquire more spectrum, which it doesn’t yet need, it is focusing time and money on improving the speed and quality of its network, area by area, coast to coast.
The purpose is to make Sprint a loved and attractive competitor once again. As long as the carrier makes the right moves now, I believe it can successfully transform the company and turn it into a growth engine once again. It’s a lot of work, but success is within its grasp. We’ll have to keep our eyes on Sprint and the moves it makes going forward.
Wireless industry is changing
We all know that Sprint is changing. However, if we pull the camera back we see the entire wireless industry is also now changing. We are in a time of historic transformation, which presents new opportunities and challenges for every player in the space.
Industry after industry is working with wireless to transform what they do. Just think about automotive, health care, retail and so on. In fact, the pay-TV industry is reinventing itself with wireless. Just look at how AT&T Mobility is changing DirecTV and creating new growth opportunities by letting users watch TV on their smartphones or tablets over the wireless network.
With this move, every competitor in the pay-TV space is under the gun to provide a similar and competitive offering. This is all thanks to wireless and the changes it is bringing to every aspect of our lives. This is just one of many opportunities the wireless industry is bringing to reality. This is great for the entire industry and individual competitors.
Conclusion
Full recovery at Sprint will take time, but I think, so far, they are making the right moves. We’ll have to keep our eyes on them going forward. Sprint and, in fact, the entire wireless industry are starting to look different going forward thanks to the changing and expanding industry opportunities.
Just like during the last decade when smartphones like iPhone and Android changed the industry, we are seeing transformation in wireless start all over again in new and expanded directions. And I believe this is just what entrepreneur Claure sees when he looks at Sprint’s future.
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