Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
By now, you will all have read umpteen different stories about how Sprint has decided to drop its (likely doomed) attempt to acquire T-Mobile US and replace CEO Dan Hesse with Marcelo Claure, founder and CEO of Brightstar. Rather than rehash what you already know, we are going to discuss what Sprint could and should do next. While Claure has some big challenges ahead, his task is far less daunting than that faced by Hesse back in 2007; Sprint today is in relatively good shape (one network, lower costs, lots of spectrum, outsourced network operations, full line of smart devices, etc.) and is not facing the need for a complete and massive overhaul. More on Dan Hesse in a later column.
So for now, here are my thoughts on what Sprint needs to do to get on an even footing with T-Mobile US (never mind AT&T Mobility and Verizon Wireless) and compete.
It’s the network, stupid
Sprint has always loved big, expansive network projects — they like to slap a name on a project (Network Vision, Spark, Ion, etc.) in the hopes consumers will all be shocked and awed by the company’s vision and flock to the stores in droves. Sprint’s tendency to try this tactic is not new; Ion predated the Nextel merger, LTE and Hesse. But contrast this approach with that of Verizon Wireless, who quietly builds its network and then relentlessly tells everyone how good it is and implies you are an idiot for not using the Verizon Wireless network. That approach worked, big time.
So, Sprint, enough with the big plans. Just finish Network Vision, get LTE out there and launch more Spark markets. Fast. Just do it and then tell everyone how great the network is. Do not worry about branding it with some fancy name (just call it “The Sprint Network”). Users will find out soon enough about the improvements and they will tell others; word of mouth recommendations are still one of the main reasons people switch carriers.
Don’t brag about planning to improve the network, get it done. Consumers do not care about 2.5 GHz, PCS, AWS, 700 MHz, TD-LTE, etc. They just want a fast, reliable network that works where they are. So finish the current plans and then tell anyone who will listen.
Sell what you have, now
That said, Sprint’s network is not bad today (certainly compared to a few years ago). After all, it offers LTE and has the same CDMA technology for 3G that Verizon Wireless uses. So start selling now, aggressively. The network needs more subscribers, so get some on there fast. T-Mobile US has demonstrated in the last year or so that you can change the marketplace and have positive net adds when competing with AT&T Mobility and Verizon Wireless.
One idea: dump unlimited. While it sounds good in principle and people may say they want unlimited, the reality is that few people actually do. Look at the number of people switching to tiered plans in exchange for a lower price and it is clear that unlimited is not the carrot it once was. Yes, there are some people who will swear they need it; let them stay. But offer some lower priced plans with two gigabytes, 4 GB and 6 GB of data. And do not be afraid to start a price war; you need more customers and Claure says Sprint is going to be the most cost-efficient operator, so hold him to it.
AT&T Mobility and Verizon Wireless have deep pockets and can lower prices further, if needed. But it will hurt them. So put more pressure on them with pricing and effectively double the efforts of T-Mobile US. Then it will get interesting.
Find the ‘pin drop’
Everyone remembers Sprint’s long-distance ads with Candice Bergen and the “pin drop.” (Heck, I remember them and I was fresh off the boat from Blighty at that time!) Sprint needs to find a new “pin drop,” and “Framily” plans are not it. Find something that catches and people notice. Verizon Wireless has the network test guy; T-Mobile US had “The T-Mobile Girl” (Carly Foulkes); and now AT&T Mobility has network engineers up in the roof putting in small cells. Sprint needs to trump them all and come up with something new and unique, like the “pin drop” was.
Give me a reason to switch to Sprint
So with a better LTE network, lower priced plans with good amounts of data, and some new ad slogans, is that still enough for me to switch? While it looks good on paper, probably not. We have a family plan with lots of data on a network that works well for us, at a reasonable price. And my operator has dropped my price plans as well as giving me a better bundle with other telecom services. So what is going to make me switch, or even consider it?
To be honest, I am not sure. I have not really considered it. So first of all, Sprint needs to make me sit up and think about it.
Our cable operator just averted a probable switch to U-verse by increasing our cable modem speeds from 15 megabits per second to 100 Mbps for free. Now, U-verse’s 45 Mbps top speed looks inadequate. Sprint’s faster Spark network may be enough to make me think about switching and then with some compelling pricing, it may be too compelling to avoid. Data speed matters and people understand faster. Going back to T-Mobile US, remember when they had HSPA+ running fast and “The T-Mobile Girl” was zipping around on a motorbike in the ads? Speed sells.
The reality is that Sprint does not need too many people to switch to be successful; just taking 2% of AT&T Mobility’s and Verizon Wireless’ subscriber base would create a massive upset in the industry. Sprint does not need 10% of their base … just 2%. Find those people and give them a reason to switch. Network. Price. Pin drop. Speed.
Don’t forget the next area of growth
Finally, Sprint also needs to be pushing the next area of growth for the industry. While connected tablets are enjoying some success, the “Internet of Things” (a fantastically nebulous term!) is going to massively increase the number of devices on the networks. Homes, cars, watches, alarm systems, thermostats, washing machines, stuff — all will be connected. AT&T Mobility has jumped into this fray in a big way (more so than Verizon Wireless and Sprint, although I am sure they would argue this). Sprint needs to push IoT forward as fast as it can and show the wide range of vendors that there is a viable alternative to AT&T Mobility. While there has been some movement on IoT, it is not enough — push harder.
Iain Gillott, the founder and president of iGR, is an acknowledged wireless and mobile industry authority and an accomplished presenter. Gillott has been involved in the wireless industry, as both a vendor and analyst, for more than 20 years. IGR was founded in 2000 as iGillottResearch in order to provide in-depth market analysis and data focused exclusively on the wireless and mobile industry. Before founding iGR, Gillott was a Group VP in IDC’s Telecommunications practice, managing IDC’s worldwide research on wireless and mobile communications and Internet access, telecom brands, residential and small business telecommunications and telecom billing services. Prior to joining IDC, Gillott was in various technical roles and a proposal manager at EDS (now Hewlett-Packard), responsible for preparing new business proposals to wireless and mobile operators.
