Sprint Corp. announced that it has appointed Marcelo Claure, the founder of mobile phone distributor Brightstar, as the company's new president and CEO.
Claure will be replacing Dan Hesse, after a failed attempt to merge with T-Mobile US Inc. Hesse served as Sprint's CEO for almost seven years since December 2007.
Claure, who was a board member of Sprint and the CEO of Brightstar, will be immediately tasked to lead the completion of the rollout of several high-speed services, along with addressing the loss of the company's customers to the other three major carriers in the United States.
Claure's appointment to the CEO position at Sprint comes after the company's attempt to merge with T-Mobile fell through due to regulatory issues.
"It seems like in the runup to trying to do the transaction with T-Mobile, Sprint all but abandoned its plan B, which is run the business," said MoffettNathanson LLC analyst Craig Moffett in an interview with Bloomberg Television.
"They have a lot of wood to chop with respect to fixing their network, fixing their pricing, fixing their brand. It's going to be a long road."
Japanese company SoftBank acquired Sprint a year ago for $22 billion, with Chairman Masayoshi Son promising upgrades for Sprint that would allow it to become at par with market leaders Verizon and AT&T.
Since Sprint's acquisition by SoftBank, Deutsche Telekom-controlled T-Mobile has rapidly grown its user base through price slashes and phone financing deals. T-Mobile's growth placed Sprint under pressure, especially after losing 245,000 monthly subscribers in the second quarter of this year while all the company's rivals increased their number of users.
However, despite the user decline, the company was able to report a quarterly profit for the first time in over six years.
Hesse is leaving the company that he helped make drastic changes in for the past seven years. When Hesse was appointed as the company's CEO, he acquired control of a company that was involved in a recently completed but troublesome merger with Nextel that was threatening to put the company into bankruptcy.
Upon Hesse's departure, the former CEO can be attributed with several changes that have brought Sprint back to life. However, the need for the carrier to obtain new customers is a problem that is still present.
"[Dan Hesse] rescued the company from a catastrophic merger and stabilized it," said Recon Analytics analyst Roger Entner. "He was a popular leader with Sprint employees -- they genuinely liked Dan."
