Karen Freitag, Sprint: Sprinting towards a new era
22 May 2013 | Kavit Majithia
Sprint's long term future remains in doubt with two takeover bids on the table, just as its new wholesale strategy begins to gather pace. Karen Freitag, the company's new VP of global sales tells Kavit Majithia of her plans to lead innovation in the segment.
Whether it is satellite provider Dish Network or Japan-based Softbank that eventually secure a deal to take a majority of Sprint, the company's business mantra is unlikely to ever change. Ã‹Å“Know, innovate and grow is now instilled in every employee at the company. It is slowly but surely becoming as catchy to the company's employees as Nike's 'Just Do It', or Nokia's 'Connecting People' slogans are to the world.
Karen Freitag, Sprint's new VP of global sales is no different, and states that whoever takes over the company will come with a predominant focus on innovating to get the company thinking differently from the past. Softbank, in its initial bid, declared it would be prepared to inject up to $8 billion in Sprint, with the intention of enabling the company to credibly compete with both AT&T and Verizon. And while this remains important, Freitag believes an equal emphasis should be placed on working with Sprint's new acquirer to figure out the right potential partners, because that is essentially what innovation is. Whereas in the past we might have gone out and acquired a company, in this climate it is important to integrate and develop solutions together for our customers. Essentially, "know, innovate and grow", she says.
Silicon Valley to Sprint
Major carriers across the world have targeted innovation as a core focus, but Sprint has taken this ethos to another level. Freitag, given her industry experience, is no stranger to such a challenge, given she worked at Silicon Valley, the very heart of technological development throughout the 2000s at a company called Bay Networks. "It was a great experience being in an environment where things are constantly moving fast," she says. Trying to harness innovation in that sort of start-up mentality in a large organisation is something that I strive for. You pretty much had to live and die with the decisions you made every day and cannot take a wait-and-see approach in that environment. She believes such experience can be applied at any big company, particularly if there is a collective focus to get things done. A sense of urgency in any company, no matter, big or small, is not a bad mentality.
Freitag's route to Sprint is an interesting one. Nortel acquired Bay Networks while she was still at the company, and consequently Freitag went on to spend 12 years at the internet company. This was before a brief two year hiatus working in supply chain logistics at supply chain firm CHEP. After returning to the industry as VP of sales at Ericsson, she worked with Sprint as a customer, and was serendipitously recommended for a role in wholesale. "I have a lot vested in Sprint," she confesses. "Coming in from this standpoint is an advantage for me because I already have strong relationships at the company. Going into the role from prior experience at both Ericsson and Nortel also enables me to learn customer specifics, from cloud to wireless, to other application based solutions. I believe I understand the industry well. And the Softbank acquisition makes it even more interesting."
At the time of interviewing, Freitag, like the rest of the telecoms industry, believed Softbank was Sprint's only credible suitor. But, as is common in the myopia of telecoms, there is a plethora of companies out there looking to consolidate, with Sprint existing as a widely attractive proposition. Dish Network, which has previously been rumoured to also be interested in both MetroPCS and Clearwire, has made no secret of its desire to get into the mobile wireless space, and decided to curtail the Japanese company's bid last month by offering $25.5 billion in cash and stock for Sprint.
Since the interview, Sprint representatives have told Capacity that Freitag's views remain the same, and that the company's board was reviewing the Dish offer. Freitag was appointed after Softbank's offer, which was accepted at the end of last year, and she was fully aware of the Softbank acquisition and what it meant when accepting the job. She says, during the interview, that Softbank's capital investment of a reported $8 billion, will serve as a great opportunity to create a stronger Sprint. â€œI would not say the takeover bid has changed our wholesale strategy," she says. "Sprint has always been committed to the wholesale business and continues to be and this will only serve to make us stronger."
Dish has thus far not pledged any capital injection into the company as part of its offer, but declared the company will benefit substantially by combining both wireless and satellite services into one bundled offer. As expected, executives at the company are now tight-lipped as to how this new offer changes the landscape for wholesale.
Sprint significantly revamped its wholesale offering mid-last year, also before Freitag's appointment, and committed to placing an increased focus on its MVNO and cloud offering. The company's Sprint Wholesale Cloud Services platform launched last July, and the solution is part intended to sign up MVNOs from across the world to leverage the operator's network. After they are signed, Sprint pledges a commitment to not only aid the launch of an MVNO in the US, but to also develop their entire business in the country.
In an apparent dig at some of the larger US players, Freitag says Sprint's offer is truly different to anything else on the market. "
This is one of the things that brings us to the table and differentiates us," she says. "Our competitors, quite frankly, are not focussed on enabling MVNOs developing, but simply getting them signed up and then selling them wholesale wireless services." Sprint's goal, according to Freitag, is ultimately orientated on extending the value of their products, growing their customer base and building brand loyalty. "The strategy, I believe, is unique from a wholesale perspective because it really offers small and medium business solutions that we can use to complement our wireless and wire line offerings. IT enables a bundled package of software as a service and bundling that with other wireless data plans."
She believes the company sits firmly as a traditional wireless operator in the US, where it is offering a total suite of solutions to its customers that can be tailored to fit specific customer needs. "We are very entrenched from a network perspective, and it's important to develop and integrate solutions to bring partners and customers together."
The long tenure
As a relatively new strategy, which is just starting to come to the fore, Freitag is certainly not planning to charge into the company and alter a working mechanism. Instead, she is focussed on nurturing existing talent and seeing it grow, which she says is one of her biggest motivators. "When you look at the wholesale business in comparison to the rest of Sprint, you have a longer tenure in this
segment in comparison to other organisations," she says. "It's a talent game, and it's important to ensure the right people are in the right places." She believes her overall success in the role will be down to attracting and retaining the right talent to achieve Sprint's overall wholesale objectives - which, of course, are to 'know, innovative and grow'.
And while seeing her staff develop serves as one of her biggest motivators, it can also prove a disadvantage for her, particularly as she claims to be known in the industry as a big exporter of talent. "I spend so much time training my team, and motivating them that, while its frustrating, it also serves as a great compliment if people end up poaching them."
Freitag says that one of her biggest hobbies is to run. "I do this more for my head rather than my body," she adds. "It's my detox time, and it enables me to work things through in my head and let my brain settle down."
With two multi-billion dollar bids to review, a lot of other people at Sprint are also likely to need that same sort of mental downtime. It is unlikely Freitag will be short of running partners over the next couple of months.
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