Sprint’s CEO Daniel Hesse will take a small pay cut during 2012 after receiving a bit of flack from shareholders for investing so much in adding Apple’s iPhone to the network. Reuters reported Hesse will lose $3.25 million from his salary. Hesse said in a statement to Sprint HR: “These voluntary actions regarding my personal compensation, which total $3,250,830, will eliminate any benefit for me to the discretionary adjustment the compensation committee made earlier this year.”
Why are shareholders so upset? Sprint, the nation’s third-largest carrier, invested $15 billion to add the iPhone to its network. However, shareholders think that was a bit much, because the network has to pay a $200 higher subsidy per-device than its other phones. I guess this is a bit of an apology from Hesse.
Sales of the iPhone on the network are pretty solid, though. The company reported a sale of 1.5 million iPhones during Q1, compared to 1.8 million during Q4 2011. A very cool 44 percent (or 660,000) of the new iPhones sold during Q1 were new customers.
I think we can all agree this sounds much better than the news regarding the AT&T’s CEO from earlier today…
Sprint, the nation’s third largest wireless carrier, is the only major wireless provider that continues to offer unlimited smartphone data plans. When its network finally landed Apple’s iPhone, many people feared unlimited data would be heading out the door. Sprint continued to offer the plans, however, and will continue to do so even after its 4G LTE network goes live later this year and once it launches Apple’s next-generation iPhone. ”I’m not anticipating the unlimited plan would change by that point,” Sprint CEO Dan Hesse told CNET. “That’s our distinctive differentiator.” The CEO believes the decision to stick with unlimited data for the iPhone has proved helpful in the company’s mission to appeal to new customers. “Frankly, it’s a marriage made in heaven,” he said about the combination of unlimited and the iPhone. “We’re clearly attracting customers from our competitors.” Hesse stressed, however, that he didn’t know when Apple would release the next iPhone, or whether it would even have LTE. “Our expectation is that we will all get the same device at the same time,” he said.
Sprint chief executive Dan Hesse is being watched closely by the company’s board of directors, but the CEO has to answer to investors and subscribers as well. Last year in October, Hesse revealed that the company is placing a massive $15.5 billion bet on Apple’s iPhone, and in a recent interview with the GSMA’s Mobile World Live blog, Hesse defended the move, which has been criticized by a number of industry watchers. Read on for more.
“Subsidises are heavy for the iPhone. This is the reason why a high percentage of new customers is important,” Hesse said during the interview. “But iPhone customers have a lower level of churn and they actually use less data on average than a high-end 4G Android device. So from a cost point of view and a customer lifetime value perspective. They’re more profitable than the average smartphone customer.”
Hesse stated that iPhone sales have “exceeded expectations” thus far, and he claimed Sprint is stealing customers away from AT&T and Verizon Wireless thanks to the iPhone. ”Four out of every 10 iPhones we sold [in the fourth quarter] are for new customers. That’s roughly double the rate of either of our competitors, so we’re pulling a lot of customers from our competitors,” he said.
The CEO points to Sprint’s unlimited smartphone data offering as a key differentiator for the carrier as compared to its competitors. ”The marriage made in heaven is unlimited plus the iPhone,” he said during the interview. “My plan is to continue for as long as we can, hopefully forever. The customers have spoken very clearly on this: they like simplicity and unlimited. It’s a differentiator in the market.”
Sprint executives are always careful to note that they hope to continue offering unlimited data for as long as the company can, constantly reminding us that this careful balancing act could topple at any time. The carrier recently announced that it was capping data usage for the mobile hotspot feature available on many smartphones, and mobile broadband plans were capped late last year as well.
Sprint has its work cut out, but not everyone is convinced the carrier can continue to compete with industry giants Verizon Wireless and AT&T. Bernstein analysts recently projected that Sprint will not sell enough iPhones to cover its $15.5 billion commitment, and one analyst with the firm, Craig Moffett, said on Tuesday that the iPhone could be part of a perfect storm that drives the carrier into bankruptcy.
After five years at Sprint’s helm, CEO Dan Hesse’s effectiveness is being called into question. While Hesse and his team have managed to stall subscriber defection, revenue continues to decline. With flops in Clearwire, WiMAX, LightSquared and a risky $15.5 billion gamble on Apple’s iPhone, Sprint investors fear the CEO may not have what it takes to lead the company against AT&T and Verizon Wireless in an industry that regulators fear has already grown too concentrated. Big investors have voiced strong concerns that the company’s management, led by Hesse, isn’t up to the job, The Wall Street Journal reported on Monday. Dragos Stefanescu, a director for the Ontario Teachers’ Pension Plan, sharply criticized Mr. Hesse at a lunch meeting in Boston last year, voicing his concerns about Sprint’s complicated network plan. The Journal’s sources, however, claim that the board remains confident in Hesse, though their close watch over every move the CEO makes suggests otherwise. “The board has been stunningly engaged,” one person said. “It sort of has to be because the company’s not doing well.”
Sprint was reportedly just hours away from an multi-billion dollar acquisition of the MetroPCS network. Then the company's board got involved. Now, Sprint CEO Dan Hesse
might be running for his professional life. More »
Sprint announced on Wednesday that it expects to activate its upcoming 4G LTE network in Baltimore and in Kansas City. The carrier has already said that it will flip the switch on its first 4G LTE networks in Atlanta, Dallas, Houston and San Antonio by mid-2012. The carrier’s first LTE devices will include Samsung’s Galaxy Nexus, the LG Viper 4G LTE and the Sierra Wireless Tri-Network mobile hotspot. Sprint said it also expects to improve the 3G coverage in each of the aforementioned markets. Sprint’s CEO Dan Hesse also said Wednesday that 86% of the phones his company sold during the fourth quarter were smartphones and that 66% of Sprint’s subscriber base now use smartphones, and the carrier’s 4G LTE network will certainly benefit any smartphone user that may be looking for faster download and upload data speeds. Sprint’s full press release follows after the break.
Baltimore and Kansas City Sprint Customers to Benefit from 4G LTE and 3G Enhancements in 2012
Sprint adds to the list of cities to benefit from new and improved network technology by mid-year
OVERLAND PARK, Kan. (BUSINESS WIRE), February 08, 2012 – Sprint (NYSE: S) today announced that Baltimore and Kansas City are expected to receive 4G LTE and upgraded 3G service by mid-2012. Sprint recently announced that 4G LTE and enhanced 3G service are also expected by mid-2012 in Atlanta, Dallas, Houston and San Antonio. Sprint 4G LTE will enable faster speeds for data applications, and the enhanced 3G service promises better signal strength, faster data speeds, expanded coverage and better in-building performance.
The launch of these large metropolitan areas demonstrates the continued commitment by Sprint to invest in its network through Network Vision. Sprint customers in these areas will soon enjoy ultra-fast data speeds and improved 3G voice quality. Whether a Sprint customer is using a smartphone to share a video of a double overtime game between the Kansas Jayhawks and Missouri Tigers or a Baltimore chef is checking the Web via a mobile hotspot for a new way to serve crabcakes, Sprint 4G LTE will make it easier. And, when someone makes an important voice call, they can expect to find a clearer connection and a stronger signal in more areas.
“Sprint is investing in its CDMA network and delivering on our commitment to ensure customers experience superior wireless voice and data service at an unbeatable value,” said Bob Azzi, Sprint senior vice president-Network. “We continue to deploy multi-mode base stations across Sprint’s nationwide cell sites and are expecting improvements in voice quality, signal density and data speeds. Today’s good news demonstrates the phenomenal progress that our teams are making toward implementing this new technology.”
The initial devices already announced to run on 4G LTE will be Galaxy Nexus™, boasting a pure Google™ experience, LG Viper™ 4G LTE with eco-friendly features, and Sierra Wireless™ Tri-Network Hotspot, a 3G, 4G and 4G LTE mobile hotspot. More information is available at www.sprint.com/4glte.
Sprint has been a 4G innovator since first launching the technology in 2008. Sprint has launched more than 25 4G-enabled smartphones, USB connection cards, notebook/netbook products, mobile hotspots and routers. Sprint offers a proven, reliable 4G experience for millions of customers compared to other national wireless carriers. Additionally, Sprint is a leader in value, with Sprint Everything plans with Any Mobile, AnytimeSM, including unlimited data, texting and calling to and from any mobile phone in America while on the Sprint network. With Sprint’s unlimited data plans, customers don’t have to worry about throttling or data overage charges on their monthly bill as they might with tiered data plans from other carriers.
Sprint’s CEO Dan Hesse said in a note to employees Friday that Sprint will merge the marketing and sales teams of its enterprise and consumer businesses into one body. Hesse said the carrier is restructuring in an effort to better streamline its operations, Reuters reported on Friday. As a result, Sprint is also removing four executives from their roles with the firm. “As the wireless market has evolved, the lines between consumers and businesses have blurred,” Hesse said, according to a note to employees obtained by Reuters. “We believe that we no longer need to support two separate business units, and that it is more logical now to evolve to unified marketing and sales organizations. Because of the enormous investments we’re making this year in Network Vision and in the iPhone, we need to consistently be looking for ways to be more efficient.” Sprint’s chief marketing officer Bill Malloy will run the merged marketing and sales unit. Sprint has decided to remove the president of its consumer services group, Bob Johnson, the president of its integrated solutions group, Danny Bowman, the senior vice president of its corporate development and spectrum, Chris Rogers, and the senior vice president of consumer marketing, John Carney.
Almost every one of Sprint’s recent commercials takes aim at other carriers’ data caps and throttling, while the Now Network promotes “truly unlimited” data. However, on Wednesday reports began to circulate that Sprint throttles the top 1% of unlimited data users. Sprint responded to these claims and assured customers that it is indeed the only carrier with truly unlimited smartphone data. “Sprint does not throttle any postpaid phone data users for on-network or off-network usage,” a Sprint representative posted on the company’s website. “Sprint is the only national carrier offering smartphone users truly unlimited data with no throttling, metering or overages while on the Sprint network.” The company clarified that it has various “terms and conditions which prohibit certain types of data use that may impair other customers’ usage or harm or interfere with the network.” Sprint claims CEO Dan Hesse was referring to the company’s right to terminate the service of users who violate these terms when he said “for those that want to abuse it, we can knock them off.”
According to a brief report that just went live at Reuters
is "merging its sales and marketing operations for its business and consumer operations in a streamlining that includes the departure of four top executives." Reportedly, that news was delivered by none other than CEO Dan Hesse himself, who has been in the news
a fair amount since 2012 began. Reportedly, the carrier is aiming to "gain efficiencies" in a market where hordes of customers snap up services as individuals, but actually use services tied to "employer-related contractual discounts." Hesse's exact words? "As the wireless market has evolved, the lines between consumers and businesses have blurred." Evidently, they've blurred enough to oust four unnamed bigwigs, too.
Sprint merging consumer and business sales / marketing units, giving four execs the boot originally appeared on Engadget on Fri, 06 Jan 2012 15:56:00 EDT. Please see our terms for use of feeds.Permalink
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