Marcelo Claure speaking at the World Economic Forum World Economic Forum
Sprint has appointed Marcelo Claure as its new CEO, replacing longtime boss Dan Hesse, who has struggled recently in the face of the wireless provider’s dwindling subscriber base. Claure, who founded the wireless distributor BrightStar Corporation in 1997 and grew it into a $10.6 billion business, joined Sprint’s board of directors in January.
The announcement comes amid reports that Sprint has also dropped its bid to acquire fellow wireless company, T-Mobile, a move that would have made Sprint a sturdier opponent against the two dominant carriers, Verizon and AT&T. The merger also would have rankled regulators, who want to see greater competition in the telecom space. Though Sprint has not yet commented on that decision, Claure hinted at in a statement announcing his new role. “While consolidating makes sense in the long-term,” he said, “for now, we will focus on growing and repositioning Sprint.”
That ought to be a significant challenge for Sprint’s new leader. Sprint has been steadily losing subscribers to Verizon and AT&T, withsome 220,000 customers departing last quarter alone—and that was an improvement. This is partly to do with Sprint working to upgrade its wireless network, but it can also be attributed to its competitors radically cutting costs to attract new subscribers.
Merging with T-Mobile would have solidified Sprint’s ownership of the lower-end of the phone market, but it would also give consumers fewer options for wireless carriers. Now, as CEO, Claure will have to devise new ways to grow Sprint’s subscriber base on its own.
One method of achieving may be offering subscribers more creative pricing options. Last week, for instance, Sprint announced that it was launching a new low-cost wireless plan called Virgin Mobile Custom, a prepaid family plan that gives subscribers unlimited access to top apps like Facebook, Instagram, Twitter, or Pinterest for just $12. Subscribers can also tack on additional services like unlimited music streaming for $5, or unlimited talk and text for $35.
As Rajeev Chand, managing director of Rutberg & Co, a boutique investment bank, specializing in the wireless industry, told WIRED at the time, the Custom plan is as much a bid to lure subscribers with lower pricing as it is a marketing strategy. “T-Mobile, from a branding perspective, has become the un-carrier carrier,” Chand said. “Sprint could use a healthy dose of that kind of brand rejuvenation.” Perhaps a new entrepreneurial CEO will do the trick.
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