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New Sprint CEO says he will lower axe on staff – but prices come first

'Very disruptive' new rates to be revealed next week

Internet Security Threat Report 2014

The new CEO of US mobile operator Sprint says he's planning aggressive moves to regain market share starting next week, but the big changes he has in mind will make job cuts unavoidable.

According to a report by telecoms industry news site Light Reading, Marcelo Claure, Sprint's newly minted chief exec, told employees at a company-wide town hall meeting on Thursday that his three priorities were reducing prices, improving the company's network, and cutting costs, in that order.

Claure said Sprint had "tremendous value" in its employees. When asked about that third priority of his, however, he admitted that reducing costs would inevitably lead to layoffs, although he couldn't say to what extent.

He said he plans to make lists of "must haves" and "nice to haves" for the company and that he will take a hard look at anything that falls under the latter category.

But slashing prices will be Job One, Claure said, adding that he will announce "very disruptive" new rate plans next week.

"When you have a great network, you don’t have to compete on price," Claure reportedly told staffers. "When your network is behind, unfortunately you have to compete on value and price."

Claure gave no specific details of how Sprint's pricing will change, but one likely candidate for an overhaul is "Framily," the company's family plan, which Claure said wasn't winning many customers at Sprint's retail stores.

Claure might also borrow a page from rival T-Mobile USA's playbook. After making a number of aggressive changes to its rate plans over the past year, T-Mob managed to add 2.4 million customers in the first quarter of 2014 and increased its revenues by 47 per cent, year-over-year.

One thing Claure won't do, however, is swallow T-Mobile USA whole. Softbank – which is the majority shareholder in both Sprint and Brightstar, the wireless services company Claure founded in 1997 – was seriously considering such a merger before finally deciding it wasn't the right course, Claure said. Instead, Softbank gave former Sprint CEO Dan Hesse the boot and put Claure in charge.

Once Sprint's new rate plans are in place, Claure said, he will take stock of the company's wireless spectrum holdings and begin making infrastructure improvements, with the goal of making Sprint the US's best mobile network.

"I want to make sure we're the incumbent challenger," Claure said. "We don't want the status quo." ®

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