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Marcelo declares A New Day For Sprint and changes Band 41 priorities

Mr.Nuke

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by Seth Goodwin

Sprint 4G Rollout Updates

Thursday, September 11, 2014 - 11:20 AM MDT

 

Sprint CEO Marcelo Claure has only been on the job for 3-1/2 weeks, but dramatic changes have already been made. Claure took part in Goldman Sachs 23rd Annual Communacopia Conference this morning in New York City. During the course of an approximately 35 minute onstage interview, Claure’s strategy for Sprint going forward was publicized for the first time.

 

Claure started by noting the advice he received as a first time CEO of a publicly traded company was “don’t make any changes for the first 100 days.” He continued “I just couldn't help myself. On day 4 we changed everything we do from the time we go to market.” In his first meeting with Sprint’s vice presidents in Overland Park, Claure asked a simple question. Why would anyone buy a Sprint phone?

 

The question itself was somewhat rhetorical. As Claure noted to the audience “really there wasn't really any compelling value proposition [at Sprint]." He noted that Sprint was more expensive than some of their competitors while still “coming out of a pretty traumatic network experience.” As to Framily, Claure discussed that even he himself had a hard time understanding how the plan worked, and was less than thrilled that “We were marketing with a hamster talking to people."

 

The Way Forward

 

Insight into Claure’s strategy can be traced back to his time at Brightstar. Over a 15 year period, Marcelo transformed a company from selling cellphones out of the trunk of his car in Miami, to a full scale cellular logistics corporation with over $10 billion in revenue in 2013. This entrepreneurial spirit and underdog mentality is what he is seeking to replicate at Sprint.

 

Plans

 

In the wake of complicated plans and the success of family share plans at Verizon and AT&T, Claure identified this as Sprint’s first target. Within his first four days on the job, Sprint’s post-paid plan offerings were drastically overhauled. He emphasized Sprint’s commitment to match or beat AT&T and Verizon on price as well as surpassing them by doubling the data offered on comparable competitor’s plans. By the end of Week 1, a competitive individual plan was also released.

 

By essentially concentrating plan offerings to two simple to understand plans, Claure sees the ability to market and sell these plans to consumers being easier going forward. He told store employees forget about the rule book “just go out there and be an entrepreneur… It is incredible when you empower your employees and allow them to be entrepreneurs the type of things that start to happen.”

 

Network

 

Claure is aware of the importance of the network. He specifically noted that he monitors network performance daily. Even with that, he is optimistic about where he's taking Sprint into the future. “The network is our product…We provide connectivity and the network needs to be good in order for customers to come.” He also was gracious towards what former CEO Dan Hesse had already accomplished on the network side before leaving. “He made a pretty bold move,” Claure said. “We basically went and did a whole rip and replace of our network.”

 

Marcelo noted that most of the network hardware replacement is done. Something the S4GRU sponsor site statistics bear out. Without providing details, Claure underscored something we have been hearing out of Sprint for the past several months...that the deployment of LTE Bands 25 and 26 are being accelerated with 255 million POP's now covered by Sprint LTE.

 

As we have discussed on this site numerous times, Spectrum is ultimately one of Sprint’s key differentiators. “We have over 160MHz in the 2.5 band. Our majority shareholders entire secret sauce in Japan was based on their 2.5 network.” Marcelo said 60 million POP's are currently covered by Band 41 LTE. These are former Clearwire WiMax sites that have been converted to Sprint’s Spark LTE. One of the more interesting aspects of this morning’s event was the change in Sprint’s 8T8R Band 41 deployment strategy.

 

Marcelo elaborated, “We are going to move to a smarter model in terms of how we deploy our equipment” going forward. He discussed that when he arrived, Sprint’s plan was simply to deploy new Band 41 8T8R equipment across their over 30,000 sites. Which is essentially all their existing full build Network Vision sites. The problem with this strategy according to Claure is that this “takes us too long to be good anywhere.” The new strategy has 2.5 LTE (Band 41) deployments being concentrated in areas where the existing network is overburdened.

 

In the second wave of the Band 41 8T8R deployment attack, Sprint will be “going strong after a few cities...focusing on a few critical markets and deploying an experience that hasn't been seen yet in the U.S.”

 

Shifting the focus to areas that need the extra capacity first is strategically important. If implemented properly, getting Band 41 LTE sites deployed across all markets where they are absolutely needed for extra capacity will help make the network more usable for end users. “There is no need for us to plaster the nation with 2.5, because it is going to take too long,” Claure said. “Rather we’d like to get some wins early on.”

 

The Near-Term Plan

 

To Claure, ultimately price and the network is Sprint’s winning value proposition. He noted in the wireless industry, you can either compete on price as T-Mobile has been aggressively doing as of late, or you can compete on the quality of your network as Verizon or AT&T does. That left Sprint in a precarious position, “we were the most expensive and our network is a work in progress.” Claure added, “You are going to see us now be the value driver… And potentially in the market for a really strong advertisement network.” Claure concluded, “If you can have price and the really strong network; you have a winning value proposition."

 

To compete on value in the near-term, expect Sprint to aggressively counteract competitor’s moves. Claure gave the example of T-Mobile announcing a guaranteed best price on a device buyback or trade-in. Later that afternoon Sprint countered, offering to do better than T-Mobile. Sprint was in part able to make this play due synergies with Claure’s former company Brightstar, now fully owned by Softbank.

 

Brightstar is the largest player in the phone trade-in market in the world. Claure noted synergies between Sprint and the over 1,000 companies Softbank owns or does business with are a competitive advantage. He noted that the value proposition is Sprint’s optimal strategy at this point and concluded by saying Sprint must be the ultimate disruptor in the industry.

 

You can say what you want about Sprint's past. But the future is changing. It's squarely in Marcelo's hands. And he's gaining momentum.

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Is this really a ramping up of deployment in urban areas (faster time to market) or actually a scaling back of rural deployment (maintain the current pace in urban areas but cancel exurban and rural deployment plans)?

 

That is the real question. I hope we really see an acceleration.

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Is this really a ramping up of deployment in urban areas (faster time to market) or actually a scaling back of rural deployment (maintain the current pace in urban areas but cancel exurban and rural deployment plans)?

 

That is the real question. I hope we really see an acceleration.

Probably both.  I think there are a lot of elements at play in this decision:

1.  The speed at which Sprint has been able to roll out roaming agreements through the CCA/RRRP is probably driving some 'lets see how much rural coverage we can pick up through agreements rather that buildout'.  This is really a discussion of capital efficiency, which is timely and appropriate for Sprint.

 

2.  The upcoming 600Mhz auction.  Softbank appeared to be the money behind the proposed T-Mo/Sprint joint bid.  I doubt that money evaporated when the FCC sidelined the joint bidding strategy.  I speculate they will go in aggressively and if possible acquire as much of a nation-wide footprint as is possible.

 

3.  Marketing:  Sprint needs some marquee markets where the application of B41 can put up some headlines.  In other words, Sprint needs to put the ball over the fence in a couple of RootMetrics, PC Magazine, etc. network evaluations to quell the doubters.  To do that requires a concentrated effort:  concentration on key markets (i.e. big cities, cities that are dominant for one player or another, etc.)

 

4.  Turning up the offense:  I can foresee certain markets being selected to 'bring the fight to the competition'.  What about building up B41 in NYC (VZW's home town), Dallas (AT&T's home town) and Bellvue/Seattle (T-Mo's home town) so has to put up huge performance numbers in the competition's back yard.

 

5.  Key markets, based on subscriber numbers:  At the end of the day, the network should be built around the customer and where they are/where they are using the network, etc.  That will turn the tide on customer frustration and the 'pardon our dust' excuse.

 

This Bloomberg article clarifies some of Marcelo's comments today

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Thank you for this article, the insight was great. I also appreciate the comments and back n forth to give a clearer picture. I cannot wait to see b41 in So Cal since we have issues with IBEZ (hopefully, that is a reason why we receive it in this area) though I am not sure if we are experiencing heavy loads on the network. 

Thank you to Robert & all the staff for your hard work & dedication to providing us with the best information available. It is great to be able to get a good understanding & a clearer picture of the future of SPRINT!

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Marcelo is the man who can turn it around. It makes perfect sense they should focus b41 roll-out in big metro urban area. In the small town (50,000 people) I live we need B26 instead. B41 in my town is not must-have. Give us B26 and give NYC/LAX as much B41 as possible.

 

Also thanks to Robert. It's a good day for Sprint and all S4GRU members. We got a captain who worries every day about how to accelerate the deployment and fight to get customers back.

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I have a suspicion that some of the issues before Claure came in were with the outside companies doing the build out of the network.

 

If these outside companies are held to deadlines things may improve. In speaking to tower linemen in my area they say that Tmobile is the most insistent on having network tower issues addressed right away, where Sprint doesn't seem to push or care as much.

 

I think Mr. Claure obviously has a deeper understanding of the handset end of the business, but because handsets run on carrier networks, and Brightstar is in more than 130 countries, he has a very deep knowledge of carrier network deployment and buildout.  

 

      

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Hopefully part of this change in B41 strategy involves getting existing dual-mode sites online, and 8T8R sites accessible, soon. I've been seeing some B41 around my area, but WiMAX coverage is much broader. Maybe that's because there's a bunch of wireless backhaul that wouldn't support speeds better than what B25+B26 is providing on a tower nearby. But if Sprint upgraded every WiMAX site around here (or added B41 to sites very nearby), they'd have a network that would meet or beat anyone else's around here, even without CA.

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Probably both.  I think there are a lot of elements at play in this decision:

 

1.  The speed at which Sprint has been able to roll out roaming agreements...

2.  The upcoming 600Mhz auction...

3.  Marketing...

4.  Turning up the offense...

5.  Key markets, based on subscriber numbers...

 

This Bloomberg article clarifies some of Marcelo's comments today

 

:goodpost:

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 "....and was less than thrilled that “We were marketing with a hamster talking to people."

 

 

Was I the only one that LOLed at this part?

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It will be interesting to see the list of 3-5 cities that are selected.  They could prioritize by subscriber count, ARPU, highest data usage or any number of things.

 

If it's highest data usage the list could be like the one mentioned in this article:

http://www.informationweek.com/mobile/mobile-devices/dallas-top-city-for-smartphone-tablet-use/d/d-id/1111993?

 

Would be nice if LA is one of the first few cities that are blanketed with B41 LTE with 8T8R RRUs.  Sprint needs to shut down Wimax quickly so that those cell sites can be replaced with 8T8R RRUs.

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I was excited about this change until I read that Bloomberg article. Only 3-5 cities....by 2016? I thought the previously conceived deployment strategy would have seen the vast majority of Sprint's entire footprint blanketed with 2.5 by that distant date. If anything, I was hoping for even an acceleration to that timeline. I understand targeting dense population centers first, if for no other reason than seeking a proper ROI but that pace does seem surprisingly slow to me and I'm a huge Sprint supporter. It will be interesting to see which cities are selected.

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I was excited about this change until I read that Bloomberg article. Only 3-5 cities....by 2016? I thought the previously conceived deployment strategy would have seen the vast majority of Sprint's entire footprint blanketed with 2.5 by that distant date. If anything, I was hoping for even an acceleration to that timeline. I understand targeting dense population centers first, if for no other reason than seeking a proper ROI but that pace does seem surprisingly slow to me and I'm a huge Sprint supporter. It will be interesting to see which cities are selected.

Sprint is going to continue deploying 2.5 across the entire country. The 3-5 cities by 2016 (and I think this is still likely under promise over deliver) will have Tokyo like coverage. This means adding a significant number of sites and new small cell deployments to completely blanket cover a city.

 

Again though, at the same time they will still be installing 8T8R equipment across the entire network during this time. They are still on track for 100 million POPs covered by the end of this year.

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I'm assuming the 3-5 cities/markets might be areas will be the areas to receive carrier aggregation first.

 

"So, now once we build 2.5 in some selected markets that we will be announcing soon, we are going to focus on those markets and provide an experience of the speeds that haven't been deployed in the U.S.," Claure said.

 

The fact he said "experience of the speeds that haven't been deployed in the US"

 

We'll see. Let's not forget 2x Carrier Aggregation is being deployed soon

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Sprint is going to continue deploying 2.5 across the entire country. The 3-5 cities by 2016 (and I think this is still likely under promise over deliver) will have Tokyo like coverage. This means adding a significant number of sites and new small cell deployments to completely blanket cover a city.

 

Again though, at the same time they will still be installing 8T8R equipment across the entire network during this time. They are still on track for 100 million POPs covered by the end of this year.

"Tokyo like coverage"....now THAT would be awesome. So these model cities, of sorts, will be the star shining examples of where the network is ultimately headed but we all still get our lovely 2.5, replete with 8t8r radios, beamforming and all? I can get with that.

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"Tokyo like coverage"....now THAT would be awesome. So these model cities, of sorts, will be the star shining examples of where the network is ultimately headed but we all still get our lovely 2.5, replete with 8t8r radios, beamforming and all? I can get with that.

And let's not forget that Artemis bullshit thing...   :loco:

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This is all well and good, but what about the folks in the urban areas? Many areas do not even have LTE much less "high speed".

 

Yes, I do understand that the greater population centers have the dollar advantage (more subscribers).

 

 

But, remember the USA is a little bit bigger than Japan or South Korea or even Europe (combined).

So the fly over country should be important.

 

Lateck,

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This is all well and good, but what about the folks in the urban areas? Many areas do not even have LTE much less "high speed".

 

Yes, I do understand that the greater population centers have the dollar advantage (more subscribers).

 

 

But, remember the USA is a little bit bigger than Japan or South Korea or even Europe (combined).

So the fly over country should be important.

 

Lateck,

 

It is important.  Sprint will still be working in all areas of the country at sites that are over LTE capacity, bringing B41 8T8R as necessary to increase performance.  Also, Sprint will also still be deploying B25 LTE as backhaul arrives at Network Vision sites.  And also, Sprint will be adding additional B25 capacity with additional LTE carriers in markets where they have additional PCS spectrum, or can refarm it.

 

About this urban strategy, this is for complete build outs of the B41 overlay.  These urban areas being identified are getting more complete B41 8T8R build outs now.  Sprint will still deploy B41 8T8R nationwide, including secondary, tertiary and rural markets.  But they will not receive wall to wall build out until after this urban focus.

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The network hasn't changed for the better yet. In a market that is 97% complete, I have to say that I am not that all impressed. Still dropped calls and slow data speeds. Band 41 supposedly blankets my market though I am rarely connecting to it. Not to mention the fact that my phone jumps from LTE to 3G constantly killing my battery. My phone used to last all day not it only lasts 6 hours at most. I've stuck with Sprint for the past 15 years. Not sure I can stick with them much longer. Hopefully this Claure dude is action and not all talk like Sprint has always been.

If you have dropped calls at this point, I'd suspect the handset. I haven't had a dropped Sprint call in a couple years and I'm in a troubled Motorola -> Samsung market.

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If you have dropped calls at this point, I'd suspect the handset. I haven't had a dropped Sprint call in a couple years and I'm in a troubled Motorola -> Samsung market.

 

A lot of people equate losing a call in a no coverage area as a "Dropped call".  If that was the case, Tmo would have some of the worst dropped call performance known to man.  But as we know, that's not a dropped call.  A dropped call is when you remain in coverage with enough signal, but the network drops you because of handoff failures or other network caused issues.

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The network hasn't changed for the better yet. In a market that is 97% complete, I have to say that I am not that all impressed. Still dropped calls and slow data speeds. Band 41 supposedly blankets my market though I am rarely connecting to it. Not to mention the fact that my phone jumps from LTE to 3G constantly killing my battery. My phone used to last all day not it only lasts 6 hours at most. I've stuck with Sprint for the past 15 years. Not sure I can stick with them much longer. Hopefully this Claure dude is action and not all talk like Sprint has always been.

You must be in San Antonio... and if so, you are not alone.  I have the same issues everyday, as do several other people I know on Sprint in the city.  I know our phones are all good. I know this because they have been checked, but also due to the fact that in the last 6 months, I tried several phones on Sprint in Minnesota, California, and New York. In all three areas, much better Sprint service and coverage -- almost night and day. Alas, not in San Antonio. It is still bad here. Maybe it will better soon. Maybe we will be one of the 3-5.

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