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Why Sprint’s Value Proposition Might Be Improving

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Mar. 31 2015, Updated 8:05 p.m. ET

Sprint’s value proposition in Claure’s tenure

Earlier in this series, we mentioned that Sprint (S) was losing customers to the other national carriers during the first three quarters of 2014. There were issues with the quality of Sprint’s network. The company was upgrading its network during the period.

According to Sprint’s CEO, Marcelo Claure, the other national carriers—AT&T (T), Verizon (VZ), and T-Mobile (TMUS)—were benefiting from Sprint’s customer losses. Claure spoke about this at the Citi Global Internet, Media & Telecommunications Conference held on January 7, 2015.

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Claure has been focusing on improving some key variables across the board to improve overall customer experience and manage customer losses. These variables include network and customer acquisition and retention. The company believes that this focus started to help it improve the overall customer experience. The company experienced better conversion rates in its stores at the end of 2014. Also, the percentage of subscribers calling Sprint’s Care was lowest during the period.

Network quality

Earlier in this series, we learned how Sprint improved its voice call quality at the end of fiscal 3Q14. According to a report by RootMetrics, Sprint’s  call performance was even better than T-Mobile’s in the second half of 2014. Sprint continues to deploy and upgrade its network to improve its voice quality and data download speeds.

Customer acquisition and retention

Sprint launched a variety of promotions to attract customers from other national carriers like Verizon and AT&T. One such plan was the “Cut Your Bill in Half Event.” It was launched in December 2014 for these two telecoms’ existing customers. According to the company, it was a success. The plan was extended until the end of 2015. Sprint’s “iPhone for Life” is a device leasing or renting option for customers. This plan also benefited Sprint.

Sprint is expanding its distribution network to reach its customers. Sprint has a lower number of stores than T-Mobile. It plans to increase its store count by 500 by the end of 2015.

Apart from customer acquisition, Sprint is also working on customer retention. The company linked the compensation of its executives with customer retention. It’s also targeting customers in its 3G portfolio to move to new Spark-enabled devices. Spark is Sprint’s high-speed wireless offering.

You can get diversified exposure to Sprint by investing in the iShares U.S. Telecommunications ETF (IYZ). IYZ held ~4.6% in the company on March 5, 2015.

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