Recently, Sprint Nextel Corporation (NYSE:S) CEO Dan Hesse held a question-and-answer session with various tech and telecommunications media members to discuss his company as the No. 3 wireless network – behind juggernauts AT&T, Inc. (NYSE:T) and Verizon Communications, Inc. (NYSE:VZ) – as well as the industry as a whole and where it goes from here. Sprint is almost finished with the full shutdown of Nextel, and has been working to market its Boost and Virgin pre-paid service companies.
Hesse was asked a wide range of questions, from the decision to spend billions of dollars for the opportunity to sell the iPhone – “We saw no reason to bet against Apple. From a brand perspective, you like having your brand associated with very strong great brands, and nobody can debate just what a great brand Apple has,” Hesse said – to Google, Inc. (NASDAQ:GOOG) acquiring Motorola Mobility – “I honestly believe they (Google) will try very hard to keep Android’s independence. We’re actually looking forward to seeing what new devices the new Motorola will bring to the market.”
Hesse is striving to bring Sprint Nextel Corporation (NYSE:S) up with the ranks of the two by-far largest wireless companies, AT&T Inc. (NYSE:T) and Verizon Communications, Inc. (NYSE:VZ) – but it has not been easy. He was a very lloud voice opposing the AT&T-T-Mobile merger, which ultimately did not go through. “There’s no question that the industry does have an issue with the size of the duopoly of AT&T and Verizon,” he said. “I believe that over time we’ll see more consolidation in the industry outside of the big two, because the gap in size between two and three is so enormous. Consolidation is healthy for the industry as long as it’s not AT&T and Verizon getting larger.”
One noteworthy answer from Hesse came in the question regarding pre-paid wireless like what Virgin and Boost offer as Sprint subsidiaries, and the overarching post-paid (contract) wireless. Hesse sees pre-paird being the next growth submarket in telecommunications. “The prepaid business is growing more rapidly than the postpaid business. We doubled-down on the prepaid business a few years ago when we acquired Virgin. As hockey great Wayne Gretzkyreportedly once said, skate not to where the puck is but where it’s going. The puck is going more to prepaid.”
And after acquiring rights to the iPhone, will Sprint Nextel Corporation (NYSE:S) be willing to compete with At&T Inc. (NYSE:T) and Verizon Communications, Inc. (NYSE:VZ) with offering the iPad on the new, faster LTE network?
“I can’t comment on that. But it’s a very good question,” Hesse said.