When Sprint (NYSE: S) merged with Nextel Corp. in 2005, more than a few wireless industry eyebrows were raised. After all, the combination of then-Cingular and BellSouth was sitting on the horizon and Sprint was most likely desperate to not get left behind. At the time, Verizon Wireless was the largest wireless provider in the U.S. and the newly-combined Cingular/BellSouth venture was poised to raise those stakes. What was Sprint to do? Merge with a company itself.The problem that would become apparently to everyone except boardroom ninnies was the technical incompatibility of the Sprint and Nextel wireless networks. Is it really economically feasible to operate two overlapping national wireless networks, even if the combined company were to see a combined customer (and revenue) count? That was the promise. It failed, and failed miserably.
Right now, the Nextel wireless network that exists is losing customers hand over fist, Sprint has booted its CEO and exited the WiMAX venture to build a national high-speed wireless data network, and the merged company apparently still operates internally as two separate companies. In a sense, the highly-efficient Nextel team was very successful as its own company, streamlining decisions and getting things done.
Enter Sprint, with a standard, bloated bureaucracy and dotted lines a mile long to get anything done. Add to that the technical network problems of Sprint neglecting the older Nextel network and there you have it -- a disaster. Whoever replaces interim Sprint Nextel CEO Paul Saleh (a former Nextel executive) will have a load of problems to fix -- from the internal culture to the outside network problems. Maybe the new leader can, you know, actually merge the two companies three years after they both merged on paper.
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Reader Comments (Page 1 of 1)
1-25-2008 @ 7:48PM
al said...
Any management team that sat down at a table in the Telcom business, and said that we have two very different systems here...IDEN and CDMA and then went ahead and merged the two companies knowing full well it would not work should be taken out and given a spanking (would like to say something else but Kelly from the golf channel got in trouble)
1-28-2008 @ 5:12PM
commchf said...
Nextel was on a path to overlay a CDMA network and begin migrating its customers to Qchat prior to the merger. Because Sprint was already building out an EVDO network the merger did make sense financially.
11-27-2007 @ 1:45PM
gman said...
sprint sucks. a very dishonest company. i hope they disolve themselves.
11-27-2007 @ 8:58PM
Louie said...
Yes, I agree as I too hate Sprint. I wish the two companies would end the merger ASAP. I hope Sprint loses more value.
11-28-2007 @ 9:54AM
Chris said...
The merger of equals is killing them. My estimation is no one is in charge, therefore no clear direction can be taken. Also, they can't merge the networks because Direct Connect (DC) will not run under CDMA. The best you can do is use Qualcomm's Q-Chat (translated Q-Crap). Q-Chat's best performance specs are 3-5 times worse than DC. Imagine a connect time of 5-11 seconds versus 1.5 seconds for DC. It will not do in the field. Sprint could move the voice calls to CDMA, but are toast with Direct Connect. Sprint will have to deliver a DC replacement that has the same performance as DC not worse performance. They lost 4 million customers on the Nextel side of the house and I expect them to lose another 2 million before somebody wakes and fixes the problem.
11-29-2007 @ 1:40PM
joann said...
the networks run off of two completely different frequency's. There are phones that Sprint has launched that utilize the cdma network (sprint and verizion) and the iden network (nextel) the companies merged the networks can not merge they run off of two different frequency's. I love Sprint
12-06-2007 @ 2:14PM
moss007 said...
garbage-worst merge in history. i am a nextel dealer for 13yrs, the last 3yrs we went from being a powerhouse nextel dealer to a %*%* sprint dealer, problems too many to list
12-09-2007 @ 3:34AM
Steven Crutcher said...
Sprint is gonna end up spinning nextel off or nextel will come back. qchat wont be able to keep up with direct connect because motorola created it. Losing battle if you ask me, and if sprint does phase out iden, its all down hill from there.