Sprint Gets New CEO, Drops Bid For T-Mobile
Sprint has appointed a new CEO to turn its slipping fortunes around. Marcelo Claure. a Bolivian-American entrepreneur, running the privately held wireless distributor Brightstar, will now helm Sprint.
Claure, 43, will replace Dan Hesse, who has been CEO since 2007, effective Aug.11
This follows Sprint's decision to drop its bid to acquire U.S. carrier T-Mobile U after months of fruitless efforts to get all regulatory clearances. The U.S. regulators are insistent that the number of carries remain at four.
Sprint's shares plunged 19 percent to $5.90, while T-Mobile fell 10 percent to $30.38 on Wednesday, reports Reuters, after news of the abandonment of the bid came through.
Sprint's Japanese parent, SoftBank Corp and its founder Masayoshi Son, wanted the merger to take on U.S. market leaders AT&T Inc and Verizon Communications Inc .
SoftBank acquired 57 percent stake in Brightstar in 2013 for $1.3 billion. SoftBank now will buy the remainder of its shares as well.
According to media reports, Son is impressed with Claure's business acumen and wants him to bring his business savvy to Sprint too. Sprint has reported $46.5 billion in losses over the past seven years, and lost over 2.8 million customers to more efficient carriers .
Claure transformed Brightstar from a small Miami-based distributor into a global business with $10.5 billion in gross revenue in 2013, according to Reuters.
Claure ,who became a Sprint board member in January, has been making regular trips to Sprint's headquarters in the Kansas City and has been interacting with company executives and studying the operations and finances.
"A 'controlled entity' like Sprint can be most effective when the majority owner and the CEO are fully aligned and are great partners," Mr. Hesse said in a goodbye note to Sprint's staff on Wednesday, reports the Wall Street Journal. "This is the right time in Sprint's evolution for Marcelo to take the reins and get the most benefit from our relationship with SoftBank."
