So now we know: Dan Hesse was never destined to live out the Sprint/T-Mobile merger. The best-paid CEO in the wireless industry— $49 million last year! —announced what was clearly a planned departure today, upon the collapse of Sprint's quixotic bid to buy T-Mobile.
Hesse was handed a mess in 2007 by his predecessor, Gary Forsee, and was asked to clean it up. Mostly, he did. Forsee's tenure was marked by two huge decisions which turned out to be disastrous: the merger with Nextel and the selection of Intel's WiMax as Sprint's 4G network technology.
Hesse spent years repairing Sprint's brand image as Nextel crumbled around him, returning Sprint from the bowels of consumer opinion to competitive levels of customer esteem, as measured by the University of Michigan's American Customer Satisfaction Index.
But his team didn't show the network-building ninja skills of MetroPCS's Ed Chao or T-Mobile's Neville Ray, both of whom managed to cobble together 4G on the cheap. Instead, the company flailed its way through failing to build a national WiMax network and ended up years behind. Sprint's Network Vision reinvention project is bold, but hasn't exactly been quick. Hesse just didn't seem up to the job of fixing Sprint's network woes with any alacrity.
Where Now, Sprint?
Sprint's owner, Softbank's Masayoshi Son, went to his own bench for a new Sprint CEO, picking Marcelo Claure from Brightstar, another Softbank subsidiary. But let's make no mistake: Son, not Claure, is the real boss here.
Sprint has amazing spectrum assets in its ex-Clearwire 2500Mhz "Spark" spectrum. And before you say that Sprint doesn't have the money to build that out properly, I'm right now watching what Rogers is doing in Canada—a smaller carrier, in a larger physical country. Rogers' 2600Mhz network in Canada's major cities made a real difference in our Fastest Mobile Networks results last year.
Meanwhile, the misnamed Brightstar is like the dark energy of the U.S. wireless industry: it operates quietly in the background. It's part of an array of very low-key but powerful wireless companies in the Miami area, most notably giant virtual carrier Tracfone.
Brightstar buys phones for third-party stores and manages returns and insurance relationships. I'm a little worried by the fact that Claure has no experience managing a network, and network management is the No. 1 thing that Sprint needs right now. But he does have experience doing things on the cheap.
Without a merger between Sprint and T-Mobile, Son will have to take a new approach. He's been talking up home broadband recently. Buying a cable provider like CenturyLink (which includes elements that were once part of Sprint anyway) and creating blazing triple-play packages the way France's Iliad has done would be one idea.
Wireless consultant Tim Farrar points out another option on Twitter: making a deal with Dish to use Sprint's Clearwire spectrum along with Dish's own spectrum for another home broadband play. We need more competition in home broadband, and if Son really has the "thousand-year plan" he has often touted, bringing true competition to home broadband would put him in a better position with regulators for later deals.
Or how about white spaces? Just as it enabled ItsOn's radical new wireless billing system and then reaped the benefits in its new Virgin Custom plans, Sprint could become a lab for new white-space wireless technologies and be the first to profit from them.
What's clear is that Son is going to have to bring aggression, wit, and creativity to reviving Sprint. With T-Mobile still in the game, he'll have some intense competition. This doesn't mean Sprint is doomed—it just means Sprint needs to think out of the box. Is Son up to the challenge? I hope so.