@ UBS Media Week: Sprint’s Hesse: Branding Campaign Helped Ease Customer Acquisition Issues
Acquisition of new customers has been a problem for Sprint (NYSE: S) since the merger with Nextel five years ago, admitted CEO Dan Hesse in a Q&A at the UBS Media Week conference. There’s been some improvement in the last quarter, he insisted. The launch of some new services, like Boost Unlimited, has helped. Hesse also credited Sprint’s advertising campaign by Goodby, Silverstein for bringing a new sheen to the brand in the eyes of consumers. A strong handset line-up is also key for customer retention as well as netting new customers.
Asked if Boost’s pre-paid product is starting to see some leveling off of new customers, Hesse said he expected to see strong results this quarter. Hesse also sees a blending of the pre-paid and post-paid market. But he believes there will still be a value-distinction among those two sets of customers. “The post-paid sign on for long contracts, plus they buy higher end devices. As you move on to 4G, it will be less about minutes. With these devices, they will be data oriented. So customers may buy monthly contracts, or yearly. Business models will change to morph with that. The biggest growth will come from non-traditional phones.”
On 4G: Hesse: “A lot of 3G networks are running out of gas. There are 450 mobile devices that can be 4G on day-one. That will benefit us. Our ownership percentage of Clearwire is higher than Verizon’s. That shows how committed we are to 4G.”
The UBS analyst tried to get Hesse to offer some thoughts on Sprint as an acquisition target, half-joking that the likelihood of the telco being bought ranges from 2 percent to 55 percent. Hesse, laughing, shook his head. “Nice try, we can’t comment on speculation.”
I asked Hesse what he thought of Google’s moves in the mobile space, particularly its acquisition of AdMob. Hesse noted that the company already has a relationship with Google (NSDQ: GOOG) via the search giant’s investment in Clearwire (NSDQ: CLWR). Sprint also has two Android phones and is preparing additional models for next year. “I think [the acquisition of AdMob] makes sense,” Hesse said. “There are more people with mobile phones than with PCs, cars and TVs combined worldwide. So you’re going to see a lot more PC-based companies making similar moves into the mobile space. Google is no exception. It makes sense the moves they are making.”
Posted In: Mobile, Technologies / Formats, 3G, Broadband, WiMax, Events, UBS Media Week, Companies, Sprint

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