NEW YORK – Sprint's new owner is replacing its longtime CEO with a Bolivian billionaire and entrepreneur after dropping its bid for rival wireless carrier T-Mobile US.
Marcelo Claure, CEO of Miami cellphone distributor Brightstar, will replace Dan Hesse on Monday, Sprint Corp. said Wednesday.
Brightstar Corp. is part of Softbank Corp. of Japan. Softbank bought 70 percent of Sprint last year.
Sprint shares plunged in midday trading as its chairman and incoming CEO talked about adopting aggressive tactics to compete with AT&T and Verizon, likely including price cuts.
The Wall Street Journal said Tuesday that Sprint decided not to pursue the merger of the No. 3 and No. 4 U.S. carriers. The paper cited unnamed people familiar with the matter.
The proposed merger would have faced tough opposition from U.S. regulators who want to preserve competition among wireless carriers, and Wall Street analysts saw little chance of the deal being consummated.
In a statement issued Wednesday, Softbank's chief executive officer and chairman of Sprint said the company's focus had shifted away from acquisitions, although he did not address the Sprint deal specifically.
“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,” Masayoshi Son said.
Part of Son's desire to buy T-Mobile probably lay in his desire to bring T-Mobile CEO John Legere into his team.
The foul-mouthed, jeans-wearing Legere has upended long-standing industry practices and brought customers streaming back to T-Mobile, though he has no profits to show for his efforts.
With the T-Mobile deal now scotched, Son had to look elsewhere for iconoclastic leadership, said analyst Roger Entner of Recon Analytics.
“Son is looking for a more entrepreneurial spirit … he's looking for someone willing to break the rules,” Entner said.
In his own statement, Claure, 43, suggested that Sprint would be taking on Verizon and AT&T through price cuts.
“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,” he said.
Claure, the son of a Bolivian diplomat who moved to the United States in the 1990s, built Brightstar into the world's largest distributor of cellphones, initially by exporting phones to Latin America. He then persuaded U.S. cellphone carriers that they're better off outsourcing that side of the business.
Softbank will be acquiring his stake in the company, it said.
The chairman of the Federal Communications Commission, Tom Wheeler, welcomed news of Sprint dropping its T-Mobile bid.
“Four national wireless providers is good for American consumers,” Wheeler said in a statement. “Sprint now has an opportunity to focus their efforts on robust competition.”