Sprint replaces its former CEO Dan Hesse with Marcelo Claure
In the previous part of this series, we discussed the ups and downs that Sprint (S) has gone through over the last few years. We saw how Sprint’s financial position is improving, although at a slower pace.
After Sprint decided to abandon its pursuit of T-Mobile (TMUS) in early August, the company replaced its then-CEO, Dan Hesse, with Marcelo Claure. Marcelo previously founded Brightstar, which is a distributor and service provider to the wireless industry. Founded in 1997, Brightstar’s gross revenues have grown to $10.5 billion and the company has increased its presence to 50 countries.
Claure’s taking a few initiatives to improve Sprint’s results
Although it’s been only a few weeks since Claure joined Sprint as CEO, he has already made a lot of changes in the company. During the Goldman Sachs 23rd Annual Communacopia Conference held in September this year, Claure revealed that the first thing he introduced was family share packs. These are similar to the family plans that Verizon (VZ) and AT&T (T) offer, the More Everything plan and Mobile Share Value plan, respectively. But the main difference of Sprint’s family plan is that it offers double the data that competitors are offering.
Claure also mentioned that the company is now focusing on cost savings. He acknowledged that the company’s EBITDA[1. Earnings before interest, tax, depreciation, and amortization.] margin is the lowest in the industry. As the chart above shows, Sprint’s adjusted EBITDA of 21% is below Verizon’s and AT&T’s. In the last quarter, Verizon’s adjusted EBITDA margin was 35%, while AT&T’s was 36%. But Claure is hopeful that some stringent cost savings measures could help the company achieve better profitability.
Another initiative that Claure undertook was to introduce an unlimited plan with Apple’s (AAPL) iPhone 6 for an attractive $50 per month. T-Mobile currently offers this unlimited plan for $80, while Verizon and AT&T don’t offer this plan at all.