Sprint CEO Dan Hesse, during the company's first-quarter earnings call, argued that Sprint led the U.S. to 4G "supremacy" and outlined why a third, true market competitor is necessary.
Sprint CEO Dan
Hesse, during a conference call April 28 to talk about the carrier's earnings,
continued his sharp criticism of AT&T's proposed $39 billion bid for
T-Mobile, claiming the combined company and Verizon Wireless would have a
"duopoly" that would hurt both competition and innovation.
analysts and journalists to announce Sprint's first-quarter earnings, Hesse
said the larger AT&T and Verizon-currently the largest carrier in the
United States-would control about 70 percent of the wireless market, leaving
Sprint a distant third. It not only would be bad news for Sprint, but also for
customers in general. AT&T currently is the country's second-largest
carrier. Federal regulators still need to okay the deal, a review process that
could take a year.
innovative influence on this industry demonstrates why the wireless industry is
much better off by having a strong No. 3 player," he said. "I think
there's little doubt that Sprint's leadership in rolling out the nation's first
4G network greatly influenced Verizon's decision to pressure the industry
suppliers to accelerate the market availability time tables for the LTE
[Long-Term Evolution] standard and Verizon's own timetable to roll out 4G
services, which in turn accelerated AT&T's deployment timetable for
that, after falling behind when Europe converted to the GSM standard, the
United States has regained its " wireless network technology innovation
and supremacy" because of its leadership in 4G.
Sprint had not been a legitimate ... competitive threat," said Hesse,
"the U.S. would still be a wireless also-ran."
announced income of $259 million during the quarter on revenue of $8.3 billion-an
increase of 3 percent from a year ago. It also added more new customers during
the quarter than it has in five years, with the addition of more than 1.1
million total wireless net subscribers. Additionally, it enjoyed its best-ever
post-paid churn of 1.81 percent during the quarter, as it added its third 4G
smartphone and announced the upcoming availability of 4G tablets from
BlackBerry maker Research In Motion and HTC, bringing its total announced 4G
devices to 22.
Sprint also lost 114,000 contract subscribers during the quarter. In context,
Hesse suggested, Sprint still managed to whittle down the figure from
first-quarter 2010's 2.15 percent customer loss, while facing, now, not one but
two competitors offering an Apple iPhone 4. When asked whether a Sprint iPhone
was being planned, Hesse, unable to comment on "potential discussions"
with suppliers, joked, "What is it, like the 55th time I've been asked
suggested that Sprint's pricing has positively benefitted the overall market.
The rate plan AT&T introduced, after losing its exclusive relationship with
the iPhone, he said, looks "eerily similar" to the Any Mobile, Any
Time plan Sprint introduced in 2009.
In his closing
remarks, before opening the call to questions, Hesse took a final stab at the
topic, acknowledging that decreased competition in the industry would cause a
rise in prices-a benefit, as far as investors are concerned.
think enough thought has been given to the likely reduction in wireless
innovation, the possibility of more regulation to make up for the loss of
competitive market forces, and the influence more regulation could have on
diverting away investment dollars from wireless-to say nothing of the impact a
carrier duopoly could have on other industry players, like network
infrastructure or handset suppliers or application developers," Hesse
said. "Sprint is pro-competitive, and our investment thesis is that all
boats will float higher in a vibrant and innovative industry, especially an
industry that has the unbridled potential of wireless."