Sprint taps Brightstar chief as new CEO

Marcelo Claure replaces Dan Hesse, who served as CEO since December 2007.

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Sprint on Wednesday named Marcelo Claure its president and CEO, starting a new chapter for the embattled carrier.

Marcelo Claure Sprint

Claure, the 43-year-old founder and CEO of wireless supplier Brightstar, takes the reins from Dan Hesse, who served as CEO since December 2007. Claure will officially start Monday.

Claure takes over in a time of uncertainty for Sprint. The company, which is majority-owned by Japanese carrier SoftBank, had been widely expected to pursue a merger with T-Mobile, but has reportedly withdrawn its offer. Sprint's reputation for network quality has been tarnished by its long infrastructure-upgrade process, and T-Mobile is poised to overtake it from a subscriber base perspective.

"In the short-term, we will focus on becoming extremely cost efficient and competing aggressively in the marketplace," Claure said in a statement. "While consolidating makes sense in the long-term, for now, we will focus on growing and repositioning Sprint."

Claure is an industry veteran, having founded Brightstar in 1997. The Miami-based wireless distributor has served multiple carriers in the US, but joined the SoftBank family in January when the Japanese carrier purchased a majority stake in the company. Claure, likewise, joined the Sprint board in January.

"He has the management experience, passion and drive to create the strongest network and offer the best products and services in the wireless industry," said SoftBank CEO and Sprint Chairman Masayoshi Son.

Comments from both Claure and Son indicate that a deal between Sprint and T-Mobile is no longer in the works. The Wall Street Journal reported Tuesday that Sprint had dropped its offer for its rival.

Sprint shares fell nearly 18 percent to just under $6 on the disappointment that a merger wouldn't happen.

Claure's initial focus will be to continue pressing the company's network upgrade plan. The company has largely completed its overhaul of the 3G network, but is still working on its LTE upgrades. Its Sprint Spark enhanced LTE, which combines multiple bands of spectrum for faster service, is only in 27 markets.

The long network upgrade process has led to continual customer defections. While Sprint returned to a profit in its most recent quarter, it lost a net 220,000 customers.

As part of the transition, Claure will step down from Brightstar on Monday, and SoftBank will acquire the remaining shares in the wireless distributor.

Hesse leaves the company after nearly seven years at the reins. He helped the company salvage the botched merger between Sprint and Nextel, ushered in the company's Network Vision upgrade plan, and paved the way for the SoftBank takeover last year.

"A 'controlled entity' like Sprint can be most effective when the majority owner and the CEO are fully aligned and are great partners," Hesse said in a memo to employees. "Marcelo and Masa enjoy an exceptional relationship which has grown out of mutual respect between two very successful entrepreneurs. This is the right time in Sprint's evolution for Marcelo to take the reins and get the most benefit from our relationship with SoftBank."

Sprint declined to make Claure or Hesse available for an interview.

Updated at 8:39 a.m. PT: To include additional background and details from Hesse's memo to employees.