AT&T and Sprint
A race to become the nation’s top
O A merging market: AT&T/Cingular & Sprint/Nextel merge
O Winners and Losers: Who reaped the benefits???
O Why did we lose? Sprint-Nextel Friction and Finger
O Where’s the opportunity for improvement
O Who has the brighter Post- merger Future???
A Merging Market
O In 2005, AT&T and Cingular Wireless completed a $41 billion
dollar deal, becoming the nation’s largest wireless carrier in
terms of subscribers.
O Cingular brought along more than 46 million subscriber's;
becoming a profitable asset to AT&T and surpassing its biggest
competitor, Verizon Wireless.
O In 2005, Sprint and Nextel Wireless inked their merger as well,
becoming a serious contender in the consumer wireless
O Nextel, much like Cingular, brought a new set of subscribers to
Sprint. The companies’ wildly popular “Walkie Talkie”
cellphone on the “Push to Talk” network became Sprint’s
major cash cow at the time.
Winners and Losers: who reaped the
opening access to both the Cingular
and AT&T Wireless GSM networks to
further improve coverage, allowing
customers of both companies to use
the new, combined network without
Shortly after their merger, Apple’s
IPHONE was exclusively on AT&T’s
network. This increased their revenue
within the wireless marketplace.
Nextel did not deliver nearly the
number of subscribers that Sprint
was eagerly anticipating.
The distinct differences in business
cultures and plans for the company
from the CEO’s all the way down to
their staff members became toxic;
leading to a lack of consistent
leadership and a unrealized
Sprint, back in early 2008, passed
up on a deal to bring the IPHONE to
Sprint’s network; a self-inflicted
Customers had the ability to utilize
both companies cellular networks for
no additional charges.
Sprint and Nextel: “A match not made in heaven”.
The CEO of Sprint, Dan Hesse, was unable to get the CEO of
Nextel to compromise in terms of his role within the company
after the merger was approved. This problematic business culture
facilitated itself from the top of the organizational level down to
Consumers were complaining about the poor customer service
quality and subsequent lack of innovation with regards to Sprint’s
In fact, Gary Burcham, CEO of the Missouri Bank and Trust co.
stated that “Ten years ago, that was the phone of choice for our
customer base. Now, I don’t see them”.
Where’s the Opportunity for improving?
O AT&T is not resting. They’re relentless and determined to
become the nation’s top wireless provider.
O AT&T almost struck another huge merger with the company, T-
Mobile but the deal was not approved by member of the U.S.
Congress; citing the companies’ aspirations of becoming a
O Sprint, on the other hand, is trying to rehabilitate their
tarnished image after the distasteful merger with Nextel.
O Sprint is making strides towards doing just that. Just
recently, the company is working on offloading the Nextel
portion of the company to Japanese wireless
company, Softbank for an estimated $20 billion.
Who will have a brighter future???
Only time will tell. AT&T and Sprint have already come a long ways
regarding their profitability and customer base after merging with
Cingular and Nextel.
AT&T is a close second to Verizon Wireless regarding cellular and
data network performance.
Sprint is a distant third but can gain tremendous ground on both
companies if their upcoming merger with Softbank is agreed upon
and approved. This will eliminate a lot of the toxic waste that has been
holding the company back for quite some time.
A brighter future is ahead for AT&T and Sprint if they are innovative
and consumer savvy enough at figuring out what will keep them
signing up for more in years to come.
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