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Summary:

As the third place carrier in the U.S., Sprint — trailing AT&T and Verizon — can’t really compete on scale. Instead it’s got to embrace new technology, it’s so-called “dumb pipe” status (as Stacey Higginbotham described it), and partnerships, explained Sprint CTO Stephen Bye at GigaOM’s Mobilize conference.

Sprint's Stephen Bye at Mobilize 2011

Sprint's Stephen Bye at Mobilize 2011As the third place carrier in the U.S., Sprint — trailing AT&T and Verizon — can’t really compete on scale. Instead it’s got to embrace new technology, it’s so-called “dumbp pipe” status (as Stacey Higginbotham described it), and partnerships, explained Sprint CTO Stephen Bye at GigaOM’s Mobilize conference on Monday. Bye might not have used the words dumb pipe to explain the company’s wholesale strategy, but described it as not being afraid to enable others, even competitors, to use its network.

Bye says that Sprint is creating a business that can compete cost effectively with the two larger players, despite not having the scale or the iPhone. “Will Sprint be getting the iPhone?” asked Stacey in the on-stage interview. Bye responded that while he isn’t in a position to talk about any iPhone plans, he said Sprint has done “tremendously well” without the iPhone.

Instead of being the biggest, Sprint’s strategy is to embrace new technology and partnerships, in an effort to reach a cost structure that works for Sprint. That means taking advantage of wholesale markets to be more competitive, and Sprint has been willing to partner with large players and third parties like Clearwire and LightSquared.

Sprint is also one of the only carriers still offering unlimited data plans, as other carriers found the costs of these plans too high. “Is there pressure [on cost for unlimited data]? Yeah, and we’ve got to look at how to get the cost structure down to continue to offer this,” said Bye.

Data is also changing the way that Sprint builds out its networks across the board. The consumption habits of data, for the time of day, and the volume used, is incredibly different than the way people use voice, and Sprint is in the process of building data-focused networks, explained Bye.

Sprint also has smaller branded MVNOs like Virgin and Boost, to help it compete effectively with the larger branded players. “It’s not a one-size-fits-all market,” said Bye.

Finally Sprint is looking to the cloud for an advantage. The barrier has long been the network, said Bye, explaining that narrow connections don’t facilitate putting applications in the cloud. But now that Sprint has a 4G network plan, the cloud will become increasingly important.

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  1. Every wireless and landline carrier and cable company should adopt the dumb pipe model. They could create voice and video subsidiaries that sold those services over their own pipes if they really wanted to be in that business, but the most efficient use of their capital would be to sell bandwidth.

    It is silly for them to be in the video distribution business, for they would effectively be renting out their network to other distributors if they adopted the dumb pipe model, and they would generate more revenue from multiple distributors than by their own service, and it wouldn’t require an investment, nor added risk (when you get into the business of selling content, you have to make bets on which shows people will want to watch).

    There will be many players in the streaming business, which means there will be many losers. While the losers are being sorted from the winners, they will all be paying rent for access to the networks. Selling bandwidth is a far less risky and more profitable business than selling movies and TV shows.

  2. Sprint does not know what the heck its doing if you are CFO/CEO/COO did not allow to happen that 16 quarters losing streak, what kind of game plans did they have in mind, those executives should have fired long time ago but still lucky stock value is still $3.. it should have been lower than that..what did those people do? what’s wrong with Hesse? could they find someone to be a spokesman on its commercial, I believe an idiot actor could do much better than him..one thing though CLEARWIRE is better manage than SPRINT..

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