Even now, I'd still call Sprint and Nextel an odd couple. Three years after these two crazy kids shocked everyone by getting hitched, the combined carrier still struggles to find its identity. Admittedly, the obstacles of combining two distinct networks and customer segments were daunting, but like an undecided voter choosing between candidates, I struggle to know what the company stands for.
A quick look at the other major carriers shows that they've been more successful at developing distinct identities and brands. AT&T is the big kid on the block with a large section of handsets and a monopoly on the iPhone; Verizon Wireless has a solid voice and 3G network and a growing assortment of fancy phones; and T-Mobile wins customer service awards and it aims for a urban, youngish audience by offering affordable calling plans and unique handsets like the Sidekick and (as of Tuesday), the T-Mobile G1.
But what can you say about Sprint? What exactly is its brand? Heck, I can't even think of Sprint's marketing slogan (as in AT&T's "More bars in more places"). On one hand, Sprint can claim some interesting phones of its own--there's the Samsung Instinct, the HTC Touch Diamond, the LG Rumor, and the Palm Centro, to name a few. And I've long said that Sprint's music and video content is some of the best in the business. But even with those upsides, I don't see the company packaging them in a way that refines the carrier's image and attracts new customers, not to mention keeping current ones. Indeed, during the last four financial quarters, Sprint has continually lost subscribers, dropping from 54 million in the second quarter of 2007 to 51.8 million in the second quarter of this year.
Though customer churn is far from being a carrier's only sign of success, Sprint is facing challenges on other fronts. As News.com's Maggie Reardon reported last month, the carrier lost $344 million during the April to June quarter. Though that was an improvement over the previous quarter, its stock price remains in the cellar. Similarly, while the company no doubt enjoyed a boost from the June 20 release of the Instinct, I agree with Maggie that Sprint needs more iconic high-end phones like it. Simply put, Sprint needs more pizazz in its product line that will deliver new subscribers.
But beyond just developing signature phones, Sprint has another problem: what will it do with its iDEN network? Indeed, iDEN remains a big concern of many Nextel loyalists who have long feared losing their rugged, dependable phones and their beloved Direct Connect push-to-talk network. But as I wrote earlier this year, Sprint's rather circuitous post-merger strategy hasn't done much to calm those concerns. First, it said it would move all Nextel customers over to CDMA, while keeping iDEN for PTT calls. What's more, it introduced dual-mode iDEN/CDMA handsets to make the move easier. But after those bridge-building handsets failed to catch on, the company changed its mind. Not only did it keep the Nextel and Sprint brands separate, but it also went back to introducing iDEN-only phones. It even brought CDMA phones into the Direct Connect fold with QChat phones like the Motorola V950.
But last week introduced another a twist. Just days after Sprint used the CTIA fall 2008 show to emphasize its commitment to iDEN and announce three new iDEN phones (including an iDEN BlackBerry), Sprint CEO Dan Hesse told a Goldman Sachs conference that the carrier would consider selling its iDEN network. Just exactly what would happen to all those iDEN phones remains unclear, but when I asked a Sprint spokeswoman for comment, she assured me that the company is committed to its customers on iDEN, both now and in the future. Yet, she didn't rule out a sale. "We are exploring alternatives for our iDEN network and related operations," said Michelle Leff, the spokeswoman. "That includes continuing to improve operations, making additional investments, entering into strategic partnerships, and considering potential divestitures." Confused yet? I know I am.
I believe Sprint has what it takes to build a unique image and reputation that will build its customer base. But the back-and-forth on iDEN isn't helping the carrier's cause. The carrier can keep both brands, but it needs to build a compelling list of services and phones on both sides that will distinguish it from other carriers. I know that isn't rocket science, but it's something the company has to do to stay relevant and innovative. It made a good showing at this month's CTIA, but it still has work to do.
Kent German, CNET's cell phones guru, answers your questions about cell phones, services, and accessories and reports on the state of the industry. Send him a question.