Sprint is pulling back on plans to upgrade its network across the U.S. using its massive amount of 2.5 gigahertz spectrum, a move that will lower capital spending but raises strategic and marketing questions, analysts say. (WSJ)
Sprint unveiled new plans for new subscribers that upgrade to the Apple. iPhone for life and iPhone unlimited $50, which could be a reason it’s looking to both trim spending and to beef up its network in up to five markets.
Their strategy, is to scale back their 2.5 GHz deployment to just three to five cities, providing what they describe as a ‘Tokyo-like’ experience in those markets,” In the rest of the country, they plan to be positioned as ‘best value.’ You can see that with its $50 offering and its best deal in data plans. That marks a rather radical departure from Sprint’s and SoftBank’s previously stated strategy of building the ‘best network’ on a broad scale.
We’re guessing it was just to expensive for even Softbank to pull off.
And it presents a perhaps insurmountable, challenge for marketing. How can Sprint create a brand that stands for one thing in just a few markets (best network yada yada) and something else entirely (best value severely degraded) in the rest.”
On the stock front investors like the move.
Colby Synesael, a Cowen & Co., upgraded Sprint stock to outperform on Friday.
Sprint’s renewed focus is on removing costs, That means layoffs are coming and the company will be more surgical with its 2.5 GHz build-out than what had previously been expected by focusing on a handful of markets where it can demonstrate its differentiation, but also importantly will help limit spending.
Sprint’s decision to pursue a smaller 2.5 GHz deployment in just three to five key markets raises questions over its strategy and ability to offer unlimited data plans for smartphone users, as well as ever catching AT&T or Verizon.
Sprint’s new chief executive officer, Marcelo Claure, disclosed Sprint’s shift in plans when he met with Wall Street analysts on Thursday after presenting at a Goldman Sachs conference.
What are you thoughts on the move by Sprint?