Son Straining to Push a Slow Sprint Forward
The Wall Street Journal has published a lengthy piece on the difficult transition Sprint (NYSE:S) is undergoing with the leadership of SoftBank (SFTBY.PK) CEO Masayoshi Son, who has been frustrated by the company’s lack of progress since SoftBank acquired a majority stake in the company last summer.
Among the things that have frustrated Son is Sprint’s advertising, which he allegedly once called “stupid” at a meeting, the slow growth pace that Sprint has been showing while competitor T-Mobile US (NYSE:TMUS) scoops up customers by introducing exciting new initiatives, and difficult wireless regulations in the U.S. that aren’t present in Son’s native Japan.
Son’s goal is to use Sprint to shake up the U.S. wireless industry, similarly to what he did with SoftBank in Japan. He is frustrated that the U.S. wireless industry is dominated by AT&T (NYSE:T) and Verizon (NYSE:VZ), and wants to create a more able competitor. While the company has shown slow but steady progress, things aren’t moving as quickly as Son would like them to.
Son is looking to ramp up the improvements by becoming even more involved in Sprint. He has set up an office in Silicon Valley, where he meets with Sprint execs once a month. According to sources within the company who spoke to The Wall Street Journal, Son is a hands-on leader who is openly challenging employees more than they are used to. Sources said that managers now prepare for meetings by assuming that Son will ask them the question they most dread. Many support Son’s tactics, though, saying that he offers as much praise as he does criticism and even hugs people he’s particularly happy with.
“Having a chairman who is very engaged in the business and very interested in the business is very positive for the company,” Sprint Chief Technology Officer Stephen Bye told The Wall Street Journal.
One of Son’s biggest plans for expanding Sprint is a potential acquisition of smaller rival T-Mobile. Such a merger is expected to come under heavy scrutiny from U.S. regulators, who barred AT&T from buying T-Mobile in 2011. Sprint believes that a merger between the smaller two companies would allow Sprint to become a better competitor for AT&T and Verizon, but regulators are concerned that such a merger would just cause an already tiny wireless market to shrink even further, providing consumers with fewer options.
In fact, Sprint may be reconsidering the merger altogether. Last month, Son and Sprint CEO Dan Hesse met with officials at the Department of Justice and the Federal Communications Commission. Both entities said they were opposed to such a merger.
So how can Sprint grow into a real presence on the market without acquiring T-Mobile? Son is optimistic about Sprint’s recently unveiled “Framily Plan,” which gives customers discounts for adding more friends and family to the same cellphone plan. Sprint’s most recent financials showed that the company gained a record number of subscribers during 2013, ending the year with 53.9 million subscribers.
Son is pushing Sprint full speed ahead, completely overhauling the company’s network to push for better connection speeds and developing new initiatives to draw in customers.
More From Wall St. Cheat Sheet:
- Sprint Second-Guesses Its T-Mobile Merger Aspirations
- Sprint Is Doing Well, T-Mobile Deal or Not
- Verizon Unveils ‘AllSet’ Plans: Lower Data Allowances, Lower Prices
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