After the new CEO of the company, Marcelo Claure, was considering dropping off subsidized phones, it appears that Sprint may be switching gears in 2016 back to their original place. Even if the idea regarding subsidized phones came from a statement by the CEO, without any official push behind it, investors still saw it as a telltale sign towards Sprint’s new business plans.
Over the past few years, the idea of subsidized phones has been thoroughly replaced by installment plans, allowing customers to purchase a phone for free but requiring them to pay a monthly bill for a specific period of time. Several phone companies have adopted this new technique, with T-Mobile being the first to completely drop subsidized phones in 2013.
Sprint has been through a rather eventful year in 2015, starting with its new CEO Marcelo Claure, who replaced the previous CEO, who held his position for 7 years, Dan Hesse. The purchase of all Radioshack outlets, which brought Sprint almost 1.750 retail stores, effectively doubling its previous numbers, was only the start of the tumultuous year of 2015.
The constant battle between the two retailers, Sprint and T-Mobile, was clearly seen on Twitter, with both companies’ CEOs going head to head, with every angry tweet being followed by another. This could also be seen in their companies’ business practices, constantly competing in the race for acquiring new customers.
The company currently struggles to regain its previous standing in the market, a position that was lost over the 7 year period when Dan Hesse was CEO, due to $20 billion in losses, Sprint was forced to lay off over 3000 employees by the 30th of January. Until that point in time is reached, their severance pay was unfortunately cut in half, bringing a decrease of over $2.5 billion in operating costs to Sprint.
Other cuts were also made, banning limousine services for executives, reducing the amount of snacks offered on a daily basis, as well as a rather interesting order to “stop printing at work”. In truth, for the general public, these decisions might seem a bit quirky, but they are necessary in order for the company to remain relevant in the current industry and market.
In regards to their former plan of cutting phone subsidies, Sprint elected to maintain a broad range of options for its customers. The public will still be able to opt for 2-year plans, phone leasing services, and installment contracts. By providing this wide range of possible choices, Sprint hopes to regain its former glory which was overtaken by its competitor, T-Mobile, classifying the company on the 4th place in the US mobile operators list.
Taking into account the possibility that Sprint may be switching gears in 2016, it seems relatively likely that the mobile operating company will have a steady increase over the next years. But this is entirely dependent on both the phone industry, as well as the market as a whole. Only time will tell if Sprint will be able to stay afloat.