SPRINT-ING

This guy has to figure out a way to stop T-Mobile’s John Legere

August 6, 2014
August 6, 2014

The telecom business just got another interesting (and potentially exciting) CEO, and his name is Marcelo Claure.

The Bolivian-American entrepreneur, who currently runs privately held wireless distributor Brightstar, was just appointed CEO of Sprint, America’s third-biggest mobile carrier. Based in Miami, Claure is close with British soccer star David Beckham (the two reportedly are business partners on the city’s new soccer team) and already worth nearly $1 billion. 

But will all that buzz carry over to Sprint?

Sprint’s path back to growth just keeps getting more complicated. The company (and its Japanese owner, SoftBank) are walking away from their long-running pursuit of T-Mobile US, the fourth-biggest carrier, people familiar with the company’s thinking confirmed to Quartz.

T-Mobile and its CEO, John Legere, who brings his own brand of excitement to the industry, have been shaking up the sector over the past 18 months, attracting customers with its low prices and unconventional marketing tactics. As the chart below shows, to a large extent the market share gains have come at Sprint’s expense.

Tap image to zoom

The T-Mobile deal faced stiff opposition from regulators in Washington, so it’s not a huge surprise that Sprint and SoftBank have walked away. But it’s also conceivable that Sprint gets hungry again for a big acquisition, be it T-Mobile or another target. After all, SoftBank’s CEO, Masayoshi Son, is hugely ambitious and long-term in his thinking (some CEOs are criticized for not seeing past the next quarter; Son has a vision for SoftBank for the next 300 years).

Meanwhile, T-Mobile and its German parent, Deutsche Telekom, find themselves in an interesting predicament. Last week  T-Mobile received a surprise takeover bid from France’s Illiad, which was founded by Xavier Niel, a entrepreneur who built some of his fortune in the sex-shop business and through sex-chat sites on the Minitel, France’s early internet-like service.

Illiad has been employing tactics similar to T-Mobile US’ to win market share in France. Deutsche Telekom is reportedly lukewarm on the Illiad offer, but it’s no secret the German giant would like to depart the US market—and now the French offer is the only one on the table.

As for Sprint, Claure needs to come up with a strategy to defeat Legere, and quickly. It’s going to be fun to see how that pans out.

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