Sprint Said to Name Brightstar’s Marcelo Claure as CEOOlga Kharif and Alex Sherman
Sprint Corp. plans to name Marcelo Claure, the founder of mobile-phone distributor Brightstar Corp., as its new chief executive officer, according to two people familiar with the matter.
The appointment of Claure, a board member at Sprint and the CEO of Brightstar, will be announced as soon as today, said the people, who asked not to be identified because the plans are private. Both companies are controlled by SoftBank Corp. Claure will replace Dan Hesse, 60, who has led the third-largest U.S. wireless carrier since December 2007.
Claure’s elevation comes after Sprint abandoned talks to combine with T-Mobile US Inc. because of regulatory concerns, a person with knowledge of the matter said yesterday. The new CEO will need to finish the rollout of high-speed services and stem a loss of customers to the other three major U.S. carriers.
“Sprint still needs to get its network under control and adjust pricing to at least match competitive levels,” Philip Cusick, an analyst at JPMorgan Chase & Co., said in a report. “If the CEO does turn over, we believe investors would rather have an experienced industry executive off the board take over than see an outsider starting fresh, or even worse a search for a candidate.”
When SoftBank paid about $22 billion for control of Sprint about a year ago, billionaire Chairman Masayoshi Son pledged to upgrade its network so the Overland Park, Kansas-based company could compete with Verizon Communications Inc. and AT&T Inc.
Since then T-Mobile, which is controlled by Deutsche Telekom AG, has won customers with price cuts and phone financing offers to accelerate growth in users. That has increased the pressure on Sprint, which just posted its first quarterly profit in more than six years.
In the June quarter, Sprint lost 245,000 monthly subscribers, while all three other carriers added users.
John Legere, the CEO of T-Mobile known for wearing company-branded shirts and taunting competitors on Twitter, was likely going to run the combined company if a deal with Sprint had gone ahead, two people familiar with the matter said in June, asking not to be identified because the discussions were private.
Claure, 43, will be appointed less than a year after SoftBank agreed to buy a majority stake in his mobile-phone distributor for $1.26 billion as part of the Japanese carrier’s push for international expansion.
Claure built his wealth through Brightstar, which sold a 57 percent stake to SoftBank in October. Claure’s 43 percent stake in Brightstar is estimated to be worth $950 million.
Brightstar had about $7 billion in revenue in the year ending June 2013 with a presence in more than 50 countries delivering wireless products and services, according to its website. In February, it bought SoftBank’s Commerce and Services division, a move Claure said would generate an additional $3 billion in sales.
Claure also has real-estate investments in Bolivia as well as education investments in Mexico, and is working with soccer star David Beckham on bringing a professional team to Miami. Claure bought Club Bolivar, Bolivia’s top soccer team, in 2008.
While Hesse has largely avoided price battles, he did introduce Framily plans, an offering for friends and family, and has been investing in a super-fast network that would help Sprint compete on speed and quality, rather than price.
The company’s long-term evolution network isn’t ready yet, hampering its service quality in many cities.
Hesse can walk away with the legacy of being the man who rescued Sprint, according to Jonathan Chaplin, an analyst at New Street Research.
“He stabilized the business, acquired a robust spectrum portfolio and attracted SoftBank,” Chaplin said in an interview in June.