It was a big day Friday for the mobile phone carrier Sprint. It's stock rose 8.3 percent, amid unconfirmed chatter that it might one day merge with T-Mobile. Sprint's CEO, Dan Hesse doesn't comment on speculation, but he is willing to talk to us about all the equipment his troops have been ripping out this year -- at the cost of some disruption -- to provide data-sucking smart phones with more speed.
"2013, first of all, has been a year of rebuilding, and we think our customers will see it as very worth it when we get it completed, which we hope to do sometime later next year," Hesse says of the infrastructure improvements Sprint has been working on. "Sometimes, we use the analogy of 'The Three Little Pigs.' We're the third pig whose building that brick house, who's taking a little longer, and there's a little bit of disruption. And so next year what you're going to see is Sprint Spark, which we announced on October 30 for five big cities."
Spark is Sprint's beefed up data network. "Basically what it means for the customer is your phone can work about 50 megabits per second," Hesse says. "A year from now it will be double that, and two years from now, triple that. So you're talking 150 megabits per second for the phone."
Hesse says that aside from a faster data network, Sprint customers should soon expect to have better quality sound on phone calls.
"We have announced something called 'high definition voice,' where your wireless phone will the be better of your devices, between your landline and your cell phone. So, today, somebody with perfect hearing hears about 10 octaves. The cell phone gives you about 4 octaves. 'High definition voice' will give you 7 of those 10 octaves, so I don't think it's going to be unusual at all six months from now for people to say, 'Let's get off this landline and let's have this call on a cell phone so we can hear each other better.'"
If those advances sound like they should be enough to catapult Sprit over Verizon and AT&T from its spot as the number three carrier, Hesse says his company is more focused on a long term strategy that doesn't involve becoming number one overnight.
"I still believe we'll be number three in size for some time. You know, Verizon and AT&T are so much larger than us," he says. "We can have five phenomenal years and still not necessarily not move into the one or two spot just because of the size of the big two."
Back in October, Marketplace Morning Report talked to T-Mobile CEO John Legere, who used words like "suck" and "bloated" to describe competitors AT&T and Verizon. But when we asked him to comment on Sprint, Legere took a more measured and complimentary tone. Does that mean a merger between T-Mobile and Sprint is on the horizon? As one would expect, Hesse is staying mum on the topic. But he seems open to the possibility.
"I will say that what T-Mobile has done and what we're doing is we have to be very innovative in a variety of areas, including price, because of the size of the big two," Hesse says. "The industry would be healthier and competition would be better if there was some consolidation, and number three was closer in size to one and two."