• by Thom Forbes  @tforbes, November 4, 2014

“What?… Can you hear me?… You’re fading….” Sprint — the No. 3 mobile carrier that has been hampered by a weaker network than its lager rivals, lingering confusion over its pricing and a failed merger scheme with T-mobile — continues to lose its connection with its branded customers.

But new CEO Marcelo Claure indicated yesterday he is well aware of the problems and is “looking at the business from end to end” even as he promised to cut $1.5 billion in costs next year.

“The company said it had lost 336,000 of the industry’s lucrative postpaid subscribers in the quarter ended Sept. 30, the worst showing among the four big U.S. carriers,” Ryan Knutson reports in the Wall Street Journal. “Sprint also lost more money than Wall Street had expected and warned customer losses and the costs of upgrading its subscribers to new phones would significantly hurt its results for the year.”

“It takes time,” Claure said in a Q2 2014 earnings call yesterday that was transcribed by Seeking Alpha. “The company was in the weakest condition it has ever seen in terms of our share of gross adds in the market.”

Indeed, “Claure’s stark accounting of the company’s position echoed that of his predecessor, Dan Hesse, who has said it was like ‘catching a falling knife’ when he took over in late 2007,” Knutson writes, fairly summing up the challenges the billionaire founder of  Brightstar has faced since taking over as CEO 85 days previously.

The overarching issue facing Sprint when he arrived, Claure told the analysts, was its “competitive value proposition” due to its disadvantage “on two fundamental drivers of purchase decision in wireless price and network where family pricing was confusing, complex and not competitive.” He also pointed out that the “Sprint brand was weak” with its customers’ “willingness to recommend” the brand “the lowest among the four big wireless carriers.”

But he went on to claim that its new pricing, which rolled out on Aug. 22, “stands for the best value in wireless, giving customers more of what they want, high-speed mobile data for the same or better process [at] AT&T and Verizon.”

Sprint actually has gained 590,000 customers over the past year, “thanks to its wholesale business, in which other businesses sell Sprint wireless services under their own name,” points out CNet’s Roger Cheng, but its branded service lost 272,000 subscribers.

“Larger rivals Verizon and AT&T have been able to keep their customer base growing and justify a premium for their services because of the breadth and speed of their networks,” Cheng observes. “T-Mobile has turned itself around through a combination of savvy marketing, which touts its rapidly improved network. Sprint, which has been slow to upgrade its network, has struggled to give customers reasons to stick around.” 

Reuters’ Marina Lopes also reports that Sprint’s “painful revamping of its network that has caused a mass exodus of subscribers.”  

“He has to cut costs, that’s the easiest way to show he is doing something overall,” Recon Analytics’ Roger Entner tells Lopes. “He needs to get aggressive with pricing to attract more customers, but, most importantly, he needs a better network.”

The company, which is 80% owned by SoftBank of Japan, reported a loss of 19 cents a share; analysts expected 6 cents a share, according to Thomson Reuters I/B/E/S. “Its operating losses narrowed to $192 million, or 19 cents a share, in the third quarter, from a loss of $398 million, or 24 cents a share, in the same quarter a year ago.Revenue rose to $8.5 billion from $7.7 billion in the year-ago quarter, slightly below the average analyst estimate.”

Although Sprint also announced it is laying off about 2,000 employees across the job spectrum to save about $400 million in labor costs, it will reopen a call center on its headquarters campus in Overland Park, Kan., hiring back about 200 customer service reps — including some laid off when its Overland Park and two other domestic call centers were shuttered in March — Mark Davis reports in the Kansas City Star.

After listening in on calls from customers, Claure told Davis, he came to believe that “call center employees at the headquarters would see the thousands of other employees on the campus and, as a result, do a better job than those far away from the company’s operations.”

“It bothered me that we had off-shored a lot of the customer care, and I’m going to start a new trend,” Claure said.

Look for it to catch on. Besides connecting better with the accent-averse American consumer, think of the dollars saved from not needing to provide accent neutralization training to all those Midwesterners peopling your phone bank.