Prepaid cell phone operator Boost Mobile LLC, part of Sprint Nextel Corp., sees calmer waters ahead after several years of stormy weather.
The company went through a lot of upheaval after Sprint bought Warren, N.J.-based prepaid competitor Virgin Mobile USA Inc. for $483 million in late 2009.
The deal made Sprint the second-biggest prepaid carrier, after Florida’s TracFone Wireless Inc., a unit of Mexico’s América Móvil SAB de CV.
It took a while for the acquisition to shake out as Sprint combined Virgin with Boost and folded them into a prepaid group under the Overland, Kan.-based parent’s umbrella.
The prepaid unit includes Boost, Virgin Mobile and a new brand dubbed Assurance Wireless aimed at people who meet certain low-income criteria.
Boost kept its hub in Irvine, but for a time it didn’t have a clear—or local—leader.
Sprint executive Andre Smith was tapped to head Boost as its vice president late last year.
“I think most people are still in flux, but we are on the verge of stability,” Smith said.
Boost has its roots in Australia and New Zealand, where it launched in 2000.
The company started offering service in California and Nevada in 2002 and was bought by Nextel Communications Corp. in 2003. Sprint bought Nextel the following year.
“Having been with Sprint for more than 10 years, change is something that most of us have become numb to,” Smith said. “But we recognize that it’s a better place on the other side.”
Integration
Smith was a main player in the integration of Virgin on the Sprint side in his New Jersey-based post as head of the customer experience team.
“It wasn’t just an acquisition,” Smith said. “It was the integration of two groups that had previously competed against each other. We had to do that in a way that kept the momentum on the two brands going.”
The two companies had much in common culturally, he said.
“What we found is that the cultures between the Virgin team and the Boost team were fairly similar,” Smith said. “They were entrepreneurial in spirit and the employee cultures were a bit more relaxed. Those two were a lot more similar to each other than to Sprint.”
At first, Dan Schulman, who was chief executive of Virgin Mobile, headed Sprint’s prepaid group from Virgin’s headquarters in Warren, N.J.
Things shifted when Schulman stepped down in July and took a post at American Express Co.
“The prepaid group under Dan Schulman was a lot more autonomous,” Smith said. “When he left, the decision was made by Sprint CEO Dan Hesse to incorporate the groups more from a cross-functional standpoint.”
That included a local executive at Boost’s office here.
Smith’s tenure so far has required him to manage through some dips. Boost’s side-by-side buildings in the Irvine Spectrum have just less than 200 workers now, down from a peak of about 250.
“Andre’s done a great job of building the life back into the offices here,” said Danielle Babbington, who heads Boost’s corporate communications. “It’s great to have a leader based here to lead these troops. There were a lot of changes to deal with.”
Smith, 38, moved his family across the country twice in the span of a year—from Kansas to New Jersey and then to Orange County.
In December, he settled in Ladera Ranch with his wife and three young kids.
Smith reports to John Carney, Sprint’s senior vice president of consumer markets in Kansas.
Smith’s preserving Boost’s humorous, sometimes irreverent brand image.
In the past, the company has associated itself with hip-hop culture, action sports and edgy musicians, artists and comedians.
Sponsorships
It’s known for sponsoring a slew of events and activities, including a car show, a high school basketball tournament, surfing and skateboarding contests and even an indie rock label.
The Virgin Mobile brand—which is sponsoring Lady Gaga’s tour—has a similar vibe.
Boost is set to focus on devices that do more with data but that still are a good deal, according to Smith.
“I think the devices matter a lot more now than they did a year ago,” he said. “For our segment of the market, that’s definitely unique.”
The company did fairly well last year with a Blackberry for a flat rate of $60 per month, Smith said.
“The device expectations from traditional prepaid customers continue to evolve,” he said. “Our move leaning into devices with more data capabilities was absolutely the right one.” Boost’s latest push is offering discounts to customers who make timely payments. For every six payments Boost customers make, $5 is taken off their monthly bill.
The company’s prepaid plans start at $50 and could go as low as $35 a month after a year and a half of consecutive payments.
“We want our customers to continue to feel like we have got their back,” Smith said.
