Sprint confirmed on Wednesday that Dan Hesse, its CEO of the last seven years, is departing effective August 11. The board named Brightstar CEO and co-founder Marcelo Claure as his replacement. The new CEO will take over Sprint as it tackles the U.S. mobile market alone. Sprint is giving up on its T-Mobile ambitions for now.
Sprint didn’t state any reason for the move, but the announcement has the feeling of a deliberate changing of the guard. Claure was named CEO, not interim or acting CEO, and it’s likely he’s been groomed for the new role since he joined the board in January.
However, in Sprint’s announcement there was no direct mention of it dropping its pursuit of a T-Mobile merger, as was widely reported on Tuesday. That’s not really a surprise, given that Sprint had never made an official bid for T-Mobile. Rather, Sprint chairman Masayoshi Son made several very public overtures. Son and Claure, however, did make several indirect references to giving up on the deal.
“While we continue to believe industry consolidation will enhance competitiveness and benefit customers, our focus moving forward will be on making Sprint the most successful carrier,” Son said in a Sprint statement.
Claure also hinted that he would revisit the idea of acquisition during his tenure:
“In the short-term, we will focus on becoming extremely cost efficient and competing aggressively in the marketplace. While consolidating makes sense in the long-term, for now, we will focus on growing and repositioning Sprint.”
But Claure’s appointment is a good sign that Sprint may be giving up on its mega-merger ambitions. The Hesse era at Sprint was marked by a constant stream of acquisitions, the revamping of all of Sprint’s networks and eventually Sprint’s own acquisition by SoftBank.
Hesse raked in a massive compensation package after the SoftBank deal closed last year (making him the highest paid CEO in telecom, according to FierceWireless). Many signs pointed to Hesse leaving after the T-Mobile ordeal was complete, whether or not Sprint succeeded with the acquisition.
Claure, 43, is relative unknown outside the tight-knit world of the wireless industry, but for more than a decade he’s been the man behind the scenes making carriers’ device supply chains tick. Brightstar handles the device distribution and logistics for carriers around the world, taking shipments of smartphones and tablets from device makers, loading them with proper carrier software and then shipping them to carrier-owned stores and other retailers. Claure founded Brightstar in 1997, when he was only 25, and it’s grown into a $10.5 billion business.
Sprint’s owner SoftBank bought a majority stake in Brightstar in January and appointed Claure to the board. Claure owns the remaining stake in Brightstar, but when he takes over Sprint next week he will resign from his old company and sell his remaining shares to SoftBank.
And just like his predecessor, Claure will inherit a carrier in a messy state.
Like the Sprint Hesse took over before him, Claure’s Sprint is racked with financial troubles and losing customers to all of its major competitors. (For more details on Hesse’s tenure you can check out this sidebar.) And while Claure won’t have to contend with a multi-year and extremely complex T-Mobile integration process, he’ll still have to get Sprint’s long-delayed LTE network built.