Can Sprint Get Out of Its Own Way? | Carriers
There has been so much water under the wireless bridge in the last few years. Sprint has tried to keep up with the big players, but even though it has a good quality mobile product and plenty of spectrum, it seems it just can’t catch a break, win market share, and become more relevant.
Based on its latest earnings report, Sprint is in better shape today than it has been in recent years, but it is still struggling with the same issue it always has struggled with: market share. Sprint has had a big problem getting the marketplace to give it a chance.
If T-Mobile Can Grow, Why Can’t Sprint?
Sprint has been dealing with this problem for decades. If T-Mobile can change and grow, Sprint can too. Why it hasn’t is the question. The answer is, Sprint has not been aggressive enough — not focused enough on growth. It has not thought of a new or different growth strategy, and stagnation has been the result.
Over the last decade, wireless customers for the most part have chosen between AT&T Mobility, Verizon Wireless and, to a lesser extent, T-Mobile. Verizon is the most expensive. AT&T is the most innovative. T-Mobile is the least expensive.
Sprint Slumps to No. 4
That leaves Sprint. After being acquired by Softbank, led by CEO Masayoshi Son, Sprint got a new CEO, Marcelo Claure. I held high hopes for the company at that point. It was starting to punch back and gain market share. I still believe Sprint could turn things around.
One challenge is that Sprint has a high cost of doing business, and it has been having a hard time dealing with that reality. The market share it gained came with a cost in lost profitability.
Now that it has backed away from being the lowest-priced competitor, Sprint has become more profitable, which is a good thing. The problem is that it still cannot win the trust of customers who continue to choose AT&T, Verizon and T-Mobile.
The Best Wireless Carrier for You
The marketplace is a funny thing. Some customers want top quality. Some want more innovation. Some want fast wireless Internet speeds. Some want a giant footprint and coverage in more places. Still others are willing to trade all that for lower cost.
AT&T and Verizon have been winning the race for customers who want quality, reach, reliability, speed and so on. T-Mobile has been winning with customers who want the lowest cost.
Sprint, however, has been struggling. It is not in the same advanced stage as AT&T or Verizon. It doesn’t offer low prices like T-Mobile.
So, what does Sprint have? It has plenty of wireless data spectrum — unused spectrum. It has been doing things with that spectrum, but it could do much more, and that would help put the company on a growth wave.
Sprint has been working with the wireless wholesale marketplace, for example. It provides wireless data service for an assortment of smaller competitors. This is great, but it is not enough. It really needs to turn up the growth dial in these sectors.
In order to do that, Sprint really needs to merge with T-Mobile. T-Mobile does not have nearly enough spectrum. Combining the companies could result in a strong No. 3 competitor.
T-Mobile needs Sprint’s spectrum, and Sprint needs T-Mobile’s marketing ability in order to grow. It’s a match made in heaven.
5G: the Next Wireless Revolution
The companies have agreed to merge — the only question is whether the proposed deal will be approved by regulators. If so, the combined company could grow in the coming 5G marketplace.
If regulators reject the deal, T-Mobile will continue to grow, even without wireless spectrum. Sprint, on the other hand, will be up against the wireless wall. It has a good — not great — product line. It has loads of wireless data spectrum. What it doesn’t seem to have is marketing ability.
This is something Sprint has struggled with for more years than I can remember. I recall going to Sprint’s wireless analyst meetings in the 1990s, 2000s and 2010s. I recall the same items being addressed by every past CEO, including Bill Esrey, Gary Forsee, Dan Hesse, Marcelo Claure and Michel Combes.
I have talked with senior executives of the company under every one of them. What I’ve concluded is that this is not a problem any CEO created — but any one of them could have fixed it. Past CEO Dan Hesse was on track and improving the company when it was abruptly acquired by Softbank.
Since Sprint was ripped out of Hesse’s hands, it has been getting better in some respects but worse in others.
It used to be the third-largest wireless carrier, but now it is fourth. Today, Sprint is more responsible with its pricing, which has helped with its profitability. However, it still has a real problem with growth.
Blocking Its Own Path
Why can’t Sprint grow? I have been asking that question for decades. It’s a good company with good people. It seems it just can’t get out of its own way and let growth happen.
Unfortunately, I don’t see anything on Sprint’s horizon that could shake things up, which is why I say its best bet for growth is to complete the merger with T-Mobile. Will the deal be approved? Who knows? There has been plenty of pushback from various corners, so we’ll have to wait and see what happens next.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.