Marcelo Claure, Softbank's choice to lead Sprint, fits the mold by breaking it
- 07 August, 2014 11:01
Marcelo Claure, Sprint's incoming CEO, knows how to corner a market and make billions doing behind-the-scenes tasks that are pretty unglamorous -- except when he's on stage with J. Lo.
Claure (pronounced CLOW-ray) founded Brightstar, the world's largest mobile device distributor, in 1997. Last year, Softbank bought a 57 percent stake in the company for US$1.26 billion and has since acquired more. Now that Claure's moving on to lead Sprint, the Japanese parent company is buying out the rest of his shares for about $300 million.
That's pretty good for a business that doesn't have any stores or branded products of its own. But Brightstar provides valuable services for more than 200 mobile operators in 50 countries. It can take care of their phones and other devices all the way from the factory, to the warehouse, to the store shelf, to trade-in and recycling or resale. The company handles complicated issues like insuring expensive smartphones and managing financing plans that let subscribers upgrade to a new phone every year.
When salespeople in carrier stores can set up a new phone for you just by popping in a SIM card, that's usually thanks to third-party distributors like Brightstar, according to Gartner analyst Bill Menezes. "They don't have to come up with a package every time for the customer," he said.
"All of these big carriers really look heavily at outsourcing what they can in those non-core types of businesses," Menezes said.
A few years ago, there were a few big rival distributors, but Brightstar started early and came out on top, analysts said.
"He realized, right when the wireless industry was exploding, that a dedicated distribution company could provide that more cheaply and efficiently -- for him, profitably -- than the carrier could do themselves," said analyst Roger Entner of Recon Analytics.
Claure, 43, was born in Bolivia and earned a bachelor's degree in economics at Bentley University, a small liberal arts school in Waltham, Massachusetts. Like Softbank founder Masayoshi Son, he came from outside the telecommunications establishment and built a multibillion-dollar business on new ways of doing things. In 2001, Softbank demanded access to incumbent Japanese carrier NTT's network and undercut the company's rates for DSL (digital subscriber line), quickly boosting broadband adoption in Japan. Softbank also came into mobile as an underdog, going up against established players such as NTT DoCoMo.
Both leaders also have a flashy side. Softbank owns the Fukuoka Hawks baseball team in Japan and promotes Softbank Mobile with bizarre TV commercials featuring an unconventional family that was the model for Sprint's "Framily" spots. Claure owns Club Bolivar, a soccer team in Bolivia, and at the CTIA trade show last year he joined singer and actress Jennifer Lopez on stage to introduce a phone-retailing joint venture for the U.S. Latino market.
Claure better fits Son's vision for Sprint, which now appears set to remain independent and compete with fourth-place carrier T-Mobile USA instead of trying to buy it, analysts said. Outgoing CEO Dan Hesse, by contrast, came to Sprint after a long career in the telecom establishment. Under his leadership, Sprint had a very different culture from Softbank's, Gartner's Menezes said.
"Softbank has always prided itself on its ability to innovate, to disrupt markets, and to identify where the gaps in the market were that it could exploit," Menezes said. Sprint once had that edge, but it's been lost, he said.
Under Claure, the country's third-largest carrier is likely to start acting more like an underdog.
"In the short-term, we will focus on becoming extremely cost efficient and competing aggressively in the marketplace," Claure said in a press release on Wednesday. "While consolidating makes sense in the long-term, for now, we will focus on growing and repositioning Sprint."
That's more likely to be a winning strategy, according to Entner.
"If you're playing the game by the current rules and you're losing, then maybe you should change the rules of the game," Entner said.