Tuesday, November 4, 2014

Sprint should make the car better.

The Japanese owner of Sprint and the new Sprint president took it in the proverbial shorts again with poor earnings, poor revenues and poor customer retention. Additionally, laying off 2,000 employees will not help, these souls will all certainly switch to AT&T a soon as they get their severance check. Sprint is not alone because the telecoms in general give people little, to no,  reason to use one or the other. Sprint and the other telecoms have no real distinguishable value except their much-touted, over-advertised electronic highways, which despite ad claims to the contrary, are at best, a virtual tie for equally not perfect.

Further, they all sell the same phone under complex financial schemes, which they must do to be creative because Apple and the other phone providers charge more for the phone than consumers are willing to pay up front. Bottom line is Sprint has no competitive edge. There is no specific consumer benefit to purchasing Sprint. And clearly no consumer is hooked onto Sprint due to their underwhelming persuasive advertising message.

Sprint is known for paying their exiting presidents huge, obscene severance packages. No doubt, this policy is used to prevent them from going to work for a competitor and divulging all of Sprint's competitive secrets. Sprint should do the opposite. They should encourage their exiting presidents to join competitors as a long term strategy to destroy their competition from the inside. What could be better for Sprint than to have their past executives influence the competition?

And yet I purchased Sprint stock again a few days ago. Since I do not learn from past mistakes, I should be working for Sprint. I am vowing today to never buy stock in a telecom. Why? They do not make phones. They do not make apps for there own services.  And so on. They focus on the highway and not the car.

If I were the president of Sprint, I would begin manufacturing computers, phones and tablets under my own name and I would develop a Sprint Application development factory to develop unique apps that consumers could only purchase from Sprint. At least it is a strategy. Sprint will never win a competitive price war because the telecoms all have similar cost structures.  If they could just provide a consumer with a single, identifiable, genuine reason to buy a Sprint product over an alternative, they might win a competition.  It's not about money as Apple has deftly demonstrated.

Focus on making the car better and yield parity to the highways.

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