Rapid Growth in Cellular Network Offerings Creates Supply Chain Pain Points for Sprint Nextel

With the recent buzz around the new iPhone 4 and excitement for the coming of 4G cell networks, the battle to come out on top is at an all-time high. Recently, Sprint became the first network to offer 4G service, but this exciting jump ahead does not come without complications – and it is exactly these types of things that make it the perfect time to sell into cell providers.

Sprint’s CEO Dan Hesse stated in their most recent earnings call that they have been having difficulty with their supply chain, especially surrounding their 4G phones since the launch of the new network. “Now, a combination of the economy improving and all of a sudden some real increased customer demand for these high-end devices is putting some strain on the supply chain. So we are working with our suppliers very closely…to try to get as much inventory as we can. We are supply constraint…we could definitely sell more if we could get more.”

Now that Sprint Nextel has finally gotten a leg up on the competition (mainly Verizon and AT&T) now is the most crucial moment to ensure that they maintain their competitive advantage. Disruptions in their supply chain while the spotlight is on them will cause permanent setbacks for their 4G campaigns moving forward, especially when Verizon and AT&T catch up to the game.

Not only does Sprint have to worry about its 4G service, but also if it wants to remain a player in the wireless market, it needs to solve its problems with its standard service quality. Since Sprint bought Nextel in 2005, the company has been struggling with the integration of the two networks while supporting the customer base of both sides. They suffered from initial technical problems that caused call quality issues in 2006, but even in 2009, they still haven’t found the solution. For now, the company has selected Ericsson to run its network, but moving forward they plain to pair down their two separate networks to eventually run as a single entity.

In the meantime, Sprint Nextel’s customer management organization is working to fill their service gaps in hasty efforts to maintain the current subscribers of their wireless services. They are planning initiatives that are designed to improve call center processes and procedures and will be investing in solutions to improve satisfaction when problems so arise.

At a time when the company is finally getting some traction to take a competitive advantage is a very tough-to-crack space, it seems that Sprint Nextel is encountering some serious supply & service issues. These things are at the very base of a successful company because they directly face the customer. You can bet the company will be heavily investing to ensure that these complications don’t ruin their current brush with success in the wireless world.

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- Carolyn Sebasky
carolyn . sebasky@salesquest.com
978.749.9999 ext. 107