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Marcelo Claure: The CEO Who Stanched The Bleeding

Marcelo Claure inherited a mess when he became Sprint president/CEO in August 2014. Sprint had been losing money every year since 2007. On top of that, Sprint’s wireless subscriber base had been shrinking in the wake of network disruptions caused by a massive network overhaul.

Claure came to Sprint from Bright-star, the telecom distribution and services company that he founded in 1997.

Since he took over, Claure has contended with a resurgent T-Mobile, which this year overtook Sprint as the nation’s third-largest carrier by subscriber base. But Sprint is finally showing signs of a turnaround, nascent though it is.

Sprint gained postpaid phone subscribers in the fiscal second quarter ending Sept. 30 for the first time in more than two years, thanks in part to the company’s phoneleasing program, improved network performance, and the company’s best-ever quarterly postpaid churn rate of 1.54 percent, Claure said.

Although postpaid phone net adds hit 237,000, Sprint still has a way to go match T-Mobile’s subscriber-growth rate. Of the 237,000, 199,000 migrated from Sprint’s Boost and Virgin Mobile prepaid services.

Claure also attributed the postpaid-phone turnaround in part to the 2015 opening of 1,435 co-branded Sprint/RadioShack stores, where postpaid activations rose compared to the period when, as RadioShack stores, the stores sold multiple carriers’ services. In the stores, Sprint products are sold by Sprint salespeople.

In another effort to expand distribution, Sprint this year teamed up with European CE retailer Dixons Carphone to build out the carrier’s base of Sprint-branded retail stores and improve the operations of all Sprint wireless sales channels. In a former joint venture with Best Buy, Dixons helped launch Best Buy Mobile stores.

In another distribution effort, Claure launched the phased rollout of a 5,000-vehicle fleet to deliver phones for free to a customer’s location, set them up and and transfer contents.

Claure’s other efforts to make Sprint more competitive include the industry’s first phone-leasing programs to reduce the monthly price of handsets.

Claure also sharpened service-plan pricing, added more data to plans, offered to halve the bills of Verizon and AT&T subscribers who switch to Sprint, and unveiled a plan to reimburse all of a consumer’s costs to switch to Sprint, including early termination fees and remaining payments on phone-installment plans.

Thanks to such efforts, Sprint turned around its wireless performance in the quarter ending September to deliver wireless operating income of $19 million compared to a year-ago loss of $110 million. The company’s consolidated net loss, however, came to $585 million, though it’s down from year-ago loss of $765 million.

As a result, Claure will now reduce operating expenses by another $2 billion and adopt a more decentralized business approach. Bloomberg reported that the company will split into four regional offices, each with presidents reporting to Claure, and create presidents for each of 19 key markets. “We are going to go fight in the local markets rather than one Sprint fighting from Overland Park,” Claure is quoted as saying.