Boost Mobile CEO Resigns

In an interesting twist, the CEO of Boost Mobile, Peter Adderton, has resigned citing meddling from Nextel upper management as the cause. Nextel created the Boost operating unit to attack the youth segment, and seems to have done a great job segmenting the market. Nextel, which owns the enterprise and blue collar segments, demonstrated their marketing savvy with Boost: Instead of just offering pre-paid service and calling it a segment strategy (like other carriers), they actually created a new entity to use different pricing, distribution, messaging, service, and customer support. The only similar approach is Sprint PCS, which essentially uses Virgin as its youth segment strategy. Boost is basically an MVNO that is owned by the MNO. Well, apparently that ownership is now smothering the subsidiary. Adderton said, “…they?re trying to turn us into Nextel in jeans. Every day, Nextel reins us in a little more and makes us increasingly corporate.” We’ve been waiting for Boost to go national, and wondering why there’s been this delay. We still expect an expansion some time in early 2004, but perhaps part of the beef is Nextel’s conservatism causing holdups. Boost could have used PTT as a differentiator earlier this year, but by 2004, most major carriers will have this feature.

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