For nearly a decade, Verizon ran a series of ads featuring actor Paul Marcarelli delivering the tagline, "Can you hear me now?" It's still a phrase that's familiar to many people, but in case you haven't heard, it's 2016 and apparently "every network is great," or so says the former Verizon pitchman who's made the switch to Sprint, the fourth largest carrier in the U.S.
High profile defections in advertising sometimes happen, though it's not an everyday thing. For one, it requires a successful initial ad campaign, which Verizon certainly had. It also requires that the initial company that used a recurring pitch person maintain relevance long after the ad campaign has run its course, and again Verizon qualifies. It's likely that Marcarelli signed a no complete clause, but it's now been several years since Verizon used him in its ads and he's still a memorable actor.
Whatever term might have existed for Marcarelli's no compete cause, assuming he signed one, must have expired and it was Sprint that pounced. The message is that the Sprint of today is much improved from the Sprint of past years. Or more to the point, Sprint says the reliability of its network is within 1 percent of Verizon, a figure it's throwing around based on data from Nielsen. Sprint also claims it saves customers 50 percent on most Verizon, AT&T, and T-Mobile rates.
In a phone interview with USA Today, Sprint CEO Marcelo Claure says Marcarelli is being "very factual" in the ad spots.
"Our goal is basically to get people when they're watching our ads or watching social media to pay attention... I think a lot of people are going to recognize Paul and see [him] in a yellow tee and ask themselves, 'what happened?,'" Claure added.
Sprint, now last among the four major wireless carriers in the U.S. after giving up third place to T-Mobile, is trying to turn things around. In its most recent quarter, Sprint reported a net loss of $554 million, or 14 cents per share, compared to a loss of $224 million from the same quarter a year prior. Part of the loss is attributable to Sprint's aggressive approach to luring customers from competing networks.
"There's been a lot of talk whether we're being irresponsible bringing in customers at 50 percent off. That's absolutely not the case," Claure said during an earnings call last month.
On the flip side, Sprint was able to reduce costs by $1.3 billion during its fiscal year 2015, and plans to cut expenses by more than $2 billion by the end of fiscal year 2016. A chunk of the savings will come from job cuts.