responds Dan Hesse of Sprint to Charlie Rose in this interview
Wow, I never thought I would hear a telecom CEO say that about any device maker. It is the new reality as I wrote in my recent book:
Prior to Apple introducing the iPhone, carriers paid device manufacturers. just enough for “planned obsolescence,” and subsidized those devices to consumers. This allowed them to lock customers into another long-term contract with the new phone. There was little device loyalty. In fact, carriers like Verizon had the marketing slogan “new phone every two years.” The iPhone is a platform with frequent software updates and an application ecosystem. So it has a much longer brand commitment. The device used to be the commodity in the equation. Now as Apple expands its carrier choices—AT&T, Verizon, and Sprint in the United States—the mobile service becomes the commodity in this changing business model.
So, kudos to Dan for realism (disclosure they have been my family’s provider after over a decade with AT&T).
In many ways, though, he still thinks like old-telco if you read the rest of the interview
He expects a global sourcing advantage based on the recent deal with SoftBank
That’s actually one of the advantages of this combination with SoftBank, in that not only can we tap into their technical expertise, but in terms of scale, whether it’s network equipment or chips or devices like phones, collectively we’ll get a better deal, yes.
He expects more industry M&A
I believe in the U.S. it’ll be very difficult for the big two, AT&T and Verizon, to make additional acquisitions of other carriers because they’re already so large. But if you include everybody else in the industry over time, I think we’ll see significant consolidation.
And when it comes to innovation
Our differentiating advantage today is that we offer truly unlimited data—data being pretty much everything except for voice and text. Everybody offers unlimited voice and text. With this transaction you’ll see more innovation, more technological leadership from Sprint. I won’t show our cards any more than that.
Really? He is talking to the Charlie Rose and that’s all he can say about innovation?
Chris Meyer of Monitor Talent in his talk at Cognizant Community last week contrasted Airtel of India with Verizon – innovation versus what he called “pseudo-competition”. He said our telcos were following the advice BCG and other strategy firms provided in the 70s “Gain market power to extract rents in a zero-sum game”. Consolidate, advertise heavily, use your sourcing leverage. BTW Chris used the hilarious sequence from the movie Duplicity to make his point about what passes for innovation in telecom.
Wonder how Apple continues to inspire so many executives in so many industries – expect those at the ones which are closest to it?
(Read this and other articles @ Deal Architect)