For the last couple of years, some have viewed Sprint as the Rodney Dangerfield of wireless. Indeed, the carrier has seen mostly negative press and perception ranging from subscriber losses to poor network execution to unfortunate technology selection, to M&A problems, and the list goes on. Add in a negative macroeconomic environment, unprecedented competition and some bad luck contributed to keeping Sprint down. Here's how I think Sprint got to its "no respect" predicament.
There's a war going on out there in the wireless space and it's for switchers. Longtime industry veterans will note that the business of switching isn't new but lately has been more pronounced than in years past. Carriers know that pricing and network play dominant roles in the switching war. What are some of the arms that carriers employ and who are the arms dealers that fuel and benefit from the situation?
Carrier aggregation will pick up as the speed war, fueled by the never ending RootMetrics reports and the subsequent carrier press releases and earnings call citations. AT&T and Verizon's network transformations are "skating to where the puck will be" in an effort to become more agile and drive down costs. So far smaller Sprint and T-Mobile haven't seen this need. There's no doubt that more changes will come about this year.
The two main disruptors in 2015 will be Sprint and T-Mobile, as they are specifically targeting AT&T and Verizon's postpaid bases. There may be shifts throughout the year and of course volatility is expected when the next iPhone version is introduced. For 2015 carrier competition remains healthy.
2014 is nearly at and end and it's the time of the year when there are countless year-end review articles and 2015 predictions. While there were many highlights of 2014, I choose to hone in on network and competition. Instead of predictions, my 2015 expectations have been laid out with technology paths and the previous year's events.
The newest instance of network parity isn't around the corner. It's looking like we'll achieve network party in 2016 and beyond. This could perhaps give us a two-to- three-year period of network parity. In this period, we should expect the carriers to heavily market their networks as being just as good as any other carrier in the market, if not better.
Postpaid competition has been dominating mainstream and industry press headlines. Postpaid device and double data promotional moves by all rivals set the competitive tone as we enter the all-important fourth quarter. On Verizon's third-quarter 2014 earnings call, CFO Fran Shammo noted that the prepaid sector growth has slowed relative to previous years, and given entry price points are so close to postpaid, some of those subscribers are moving to postpaid.
Rather than network improvement, Sprint needs network acceleration. Just as he was aggressive in pricing and promotions, Sprint CEO Marcelo Claure has the opportunity to step on the gas to expand the 2014 2.5 GHz target and accelerate the 2015 rollout with at least 250 million POPs covered before the end of next year.