Sprint Shakeup: Executives Leave as Son Cries for More Progress
Sprint confirmed the departures of two high-ranking executives last week, highlighting the carrier's growing woes and need for a new strategy.
Sprint president Steven L. Elfman will be stepping down sometime later this year, although an exact timetable was not given. On top of that, 26-year veteran of Sprint and senior vice president in charge of network infrastructure Bob Azzi will also be leaving. Sprint has not given a specific reason for Azzi's departure.
"Bob and Sprint reached a mutual understanding and Bob will be leaving. He is very actively engaged with the team to ensure a smooth transition of responsibility and we wish him well," Roni Singleton, a spokeswoman for Sprint, told Reuters.
The shakeups come in the wake of Sprint's sale to Japanese-based SoftBank Corp. last year, which has been trying to push Sprint higher than its third-place position in the U.S. wireless market. Recent quality reports indicate that Sprint trails Verizon and AT&T in many areas concerning service and coverage. Eccentric SoftBank chief executive and Sprint chairman Masayoshi Son has been adamant in changing the way Sprint does business, unsatisfied with what he considers a stagnant rate of progress.
According to the Wall Street Journal, Son has repeatedly lost his temper during meetings with Sprint executives, reportedly screaming "are you stupid?" during an October meeting concerning Sprint's advertising. He has also bashed Sprint for having a "loser" mentality and compared the Kansas-based wireless service provider to Japanese feudal lords who had influence locally, but wielded no power outside of their home turf.
"Sprint is a daimyo in Kansas," said Son. "That's not enough."
"We need to change Sprint's culture," Son told The Wall Street Journal after a news conference in February.
In order to speed up Sprint's progress, Son has apparently established a proxy headquarters for himself and SoftBank executives. In addition to being more hands on with Sprint, Son is also pushing to make Sprint bigger by acquiring T-Mobile.
"Without industry consolidation, for Sprint alone to become No. 1 in the U.S. is literally just a dream. I'm not content for Sprint to remain No. 3 because if we could grow bigger, we will offer aggressive discounts and services, just like we did in Japan," Son said during the recent Sprint quarterly earnings report.
"There is a huge gap between the bigger two and the smaller two, thus the level of competition isn't sound or strong."
Despite Son's pleas, however, a takeover of T-Mobile looks highly unlikely. U.S. antitrust officials as well as the FCC have expressed concern that further consolidation in the wireless market could hurt consumers. As it is, there are only four major carriers in the United States: Verizon, AT&T, Sprint, and T-Mobile. Even if Sprint and T-Mobile were able to merge, the new company's combined customer base would still be smaller than the second-largest carrier in the United States, AT&T.
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