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Sprint's troubles inspire rumor mill

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Sprint's recent troubles have made plenty of investors and subscribers uneasy, which has led to a number of acquisition-related rumors and highly speculative analysis. Here are three:

Sprint to spin-off Nextel

According to a Seeking Alpha report, Sprint Nextel has hired Morgan Stanley to implement board director Ralph Whitworth's plan to spin-off Nextel. Rumor has it the spin-off will be announced within the next two to four weeks. Most of Sprint's trouble can be traced back to the Nextel acquisition in the first place.

T-Mobile may acquire Sprint

Merrill Lynch analysts told the Kansas City Star today that Deutsche Telekom, owner of T-Mobile USA, might be considering a takeover of Sprint in an attempt to prevent a price war between the mobile carriers. Sprint's low share price and the weakness of the U.S. dollar both favor the European company, but Merrill Lynch said it is not privy to any inside information--it's just speculating.

Should Verizon buy Sprint?

Last week the Wall Street Journal's deals blog considered whether Verizon should acquire Sprint. The post brings up Verizon's stellar decision not to make a bid for Sprint back in 2004.

What do you think? Do any of these ring true?

For more on the rumor mill's field day with Sprint:
- read this post about spinning off Nextel
- check out this article about T-Mobile's interest
- read this blog post from the WSJ about Verizon

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Comments (30) | Post a comment
More stories about Verizon Wireless   Sprint   T-Mobile   morgan stanley   merrill lynch   Deutsche Telekom  

Comments

"Most of Sprint's trouble can be traced back to the Nextel acquisition in the first place."

You've got it backwards - Most of Nextel's trouble can be traced back to its acquisition by Sprint. Sprint has long had a rotten reputation for customer service, high churn, management disorganization, a top-down management approach that stifles innovation within the ranks, and poor network coverage. They've simply transfered those problems to the Nextel side of the house. Nextel's big problems coming into the merger were the rebanding, out-of-date technology with no upgrade path, a need for more network capacity, and debt. All of these issues were apparent before the acquisition, so Sprint should have been aware of them.

I completely agree with the above comment. Sprint had so many problems prior to the merger with Nextel. It's interesting how they are trying to put the blame on Nextel when Nextel was doing just fine prior the merger. Ultimately nothing is perfect but Nextel didn't need Sprint to save it, Sprint needed Nextel, and what did Nextel get in return......destroyed.

I vote with these two. The first note has captured it perfectly.

They could spinout the 2.5 spectrum.

He said, she said....typical day at Sprint between the two cultures.

It's really a whole lot more complex than either one sees it.

a good move would be for T-Mobile to acquire Sprint

T-Mobile buying sprint would be esstential the same thing with Sprint getting Nextel. T-Mobile = GSM Sprint = CDMA. They would have to either switch to CDMA or have sprint switch to GSM. Both not an easy or cheap task. Verizon wouldn't be able to buy them b/c the FCC wouldn't allow it. It would be too big of a company.

Sprint spinning off Nextel is the best bet. Sprint was doing well without them before and with what Sprint has ahead of them they can really turn things around. Also since Sprint took a $29.5 billion write off (mostly of the Nextel merger) they already are telling investors that they are having issues with the Nextel brand and are taking the hit for it.

Nino

Totally right. Most problems in wireless industry will be traced to Sprint. Really the cancer of our country.

negative talk of others, rumor, and speculation is the real cancer of our country. A lot of great people work for this company, there is only one culture now & great ideas have come from this merger, these are being implemented as we speak. everyone is entitled to their own opinions, but opinions don't have to be adapted by everyone. stay tuned, the bandwagon for other carriers might be taking a detour right into a roadblock. no spin-offs, no more acquisitions, no more b.s. rumors & speculation from the masses

oh yeah - almost forgot...BOOYA!

"Most of Sprint's trouble can be traced back to the Nextel acquisition in the first place."

This is totally nonsense, Nextel was cash flow positive company with excellent customer focus, top management led by Tim Donhue and others. Sprint took over and the customer churn started going up. This is something for Sprint top management to answer. Nextel was very well and efficiently managed company.

Its like the Ferrari team always used to win Formula 1 race and then Toyota bought Ferrari and in the subsequent years team Ferrari became a loosing team. And Toyota couldn't figure out why Ferrari team was not winning anymore - dah! its obvious, the professionals that made Ferrari the best Formula 1 racing team were longer there and were replace by toyota...

Same story hear! It just boggles my mind how Sprint completely messed up one of the best wireless company...

My contract is almost up and I've been checking the news often to see if things will ever get better. If Nextel is spun off, which I think is a good idea, I will probably stay. Nextel was a great company all around for me back in 2004 when I signed a two-year contract but ever since Sprint, I've had bad customer service experiences from C.S.R.'s who know nothing...but are ready to sell you something. Sprint is garbage even though CMDA is better than iDEN. But why is Verizon's CDMA better? Two people close to me have it and one day I borrowed a Verizon phone and the signal is much better than my brother's Sprint CDMA phone's service (I hung out with him that day). He's got a Razr 2 (he also had to wait hours on the phone to renew his contract and I have my own C.S. nightmare too, solved though) and the Verizon was another good Moto phone. Sprint could improve it's coverage and customer service but I'm not holding my breath. Through my own experience I hate Sprint. They've always sucked all around. Just ask a Sprint customer. I hope Sprint sinks further into the ground because they are no good.

How perfectly said! Also, Nextel had been a great employer who cared about their employees.
With Sprint, you're just a number.
Nextel was doing fine, they just needed more investors to help fund their network, not a takeover by a company that has traditionally had poor internanal and external customer service.

Sprint should spin off Nextel as a separate business unit, look for purchasers, and acquire Alltel...a well performing CDMA carrier with good presence in some fast growing markets.

The last comment is the one that makes the most sense. Two carriers with the same technology, and not much overlap, this is one the fcc would probably allow.

Two rights do not make a wrong, and two wrongs do not make a right.

You can talk all day about what should have or should not have happened. Too late, this company has made its bed, and must sleep in it, or change the sheets! The sheets are finaly now going to be changed, and maybe this company will get "right sized". Culture is culture, and this company has none. It comes from the top, and is something that you either believe in or not. The folks from Sprint and Nextel never believed in the former culture, and therefore never bought into the direction of the new company. Fixing the culture and getting a team that "believes" in success will be a huge step forward. The big question for the new CEO is how to pull this off??? Running out of time!

Fix the problems at the top, and build a much needed strategy for success, and maybe things will turn around.

Everyone in this company has been waiting to be let go. This is a "Sprint" thing, and they do this every year, or sometimes multiple times per year! With this type of working environment, how can you get anyone to join your cause? Get it fixed, and grow from there! Enough with the "annual" lay-off events, they are killing productivity, and frankly the will of those who are still at Sprint.

Stress is very high, pressure is over the top, and everyone spends much time worrying for the next cuts, and whether they will be in them. This is not a company who has shown any care for their employees for many years, Nextel is not the reason for the issues this company has today. The lack of direction from a very top heavy upper management organization has created significant problems and constraints within the company, and has now choked this company to near death.

Nextelians: Stop and think. You wanted Nextel kept separate and now you may have a chance to have it that way. But it won't be what you remember. Your cherished TIm Donahue didn't want to keep it separate, did he? Ever wonder why? Nextel reminds me of LDDS/ IDB/ Worldcom / MCI. Everyone had fun, made tons of money, it was a "great p[lace to work" and customers were delighted UNTIL the house of cards (financial reality check) came tumbling down upon them. Nextel's best move was convincing Forsee to buy them at their peak. Donahue knew they were collapsing and was only to anxious to collect his golden handshake and disappear. Remember Seidenberg's comments when all the mergers occurred--- Buying a company merely to gain size makes no sense."? Forsee was not very bright in that regard. Was Nextel a good company? Probably. Did it collapse? Yes. Was Sprint any better? No. Will all the reminiscing and passing blame around do any good? Nope? Move forward folks, the past is prologue.

Sprint should be sold, new competent management should be installed, maybe Sprint/Nextl should be split so that somebody can be responsible for PAYING ATTENTION TO NEXTEL CUSTOMERS who profile significantly different than Sprint customers - commercial vs consumer.

My personal thought is that either Qualcomm or SK Telecom should be looking at Sprint as a takeover, and restructuring deal. Qualcomm could finally deliver its technology accross the board to subscribers and make a true feature rich phone - SK could expand its reach to consumers here in the US and also bring strong features to consumers. Either company could do a better job than Sprint at Customer Service - but that is a totally different story.

The reason the US remains behind the world in Mobile Phone applications and features is that the Carriers and the Execs at Sprint are re-org'd every 6 months - worse they put people in the roles of entertainment, music, TV, applications that have NOT ONE CLUE about what consumers want - there is no continuity, and there is no strategy that can last to build product awareness or marketing - ATT cleans Sprints clock when only 2 years ago it was the other way around.

IN CONCLUSION - THE BUCK STOPS WITH THE EXEC TEAM AND MANAGEMENT THAT PAID WHAT THEY DID FOR NEXTEL THEN ABANDONED THEIR CUSTOMERS - WHILE GIVING PACKAGES OUT TO THE MANAGEMENT OF SPRINT THAT COULD OF SAVED THE DAY.

IF QUALCOMM BOUGHT SPRINT - MAYBE LAUER COULD COME BACK AND DO WHAT HE WANTED TO DO - WITHOUT THE NEXTEL ISSUES......

THEN AGAIN - MAYBE SPRINT SHOULDN'T BE HQ'D IN KANSAS.

I am not sure why so many of you are Sprint Haters. I love the company and the service. The coverage here in the Midwest is way better than Verizon. Nextel coverage was very poor to non-existant in the outer regions of St. Louis County. Prior to Sprint I was with AT&T for 8 years and that was a total joke. I am suprised I stayed with them that long. Service was horrible, call quality sucked and they were very overpriced. My wife had Verizon and hated it. With Sprint everything has greatly improved. Plus it is costing me less than what I previously had with AT&T and I have more minutes, Power Vision and more. So don't be so quick to run Sprint down. I do agree that it was a mistake to by Nextel but the 2.4 GHz spectrum that they have available to them when they shut down the 700 Mhz system was a plus for Sprint and was a cheap way to pick up the additional spectrum for wi-fi/data usage.
All the carriers have their problems, as does Wal-Mart, but I have not had any problems with Sprint. Sprint Forever!

I managed a public safety with several dozen Nextel phones. After Sprint took over, cust service tanked. Plus, Nextel is putting the screws to small public safety agencies in the rebanding process and the fcc is helping them do it. We just switched all our phones to vzw. Hated losing the nextel ptt that all public safety loves (it was the only wireless tech not overcome on 9/11), but since takeover there have been NO modern ptt devices and we couldn't stay with 5 year old devices.

VZW should acquire Sprint (feds let ATT but CellOne, so why not) but only after Nextel is spun off.

After a sum total of 8 years of employment at Sprint dating back to when it was once owned by the Southern Pacific Railroad, I must say, I worked there 3 times for a total of 8 years of my life- I have never seen such a group of slow moving product developers, I have never been mislead so badly by my employers or felt so badly about my job, and if you think it's bad now, you should understand the corporate culture has been horrible since the 80s when they couldn't even render a bill for months- I left them 3 times because I was thwarted in my attempts to get the job done, not because of money. Southern Pacific, GTE, Nextel, just fill in the blanks- none of the suitors were able to tinker with it and make it work for very long, if at all. Even the investment bankers and analysts have been shocked time and time again at execution, performance, and lack of transparency.

It's terrible to see Sprint, the nations first fiber optic network and such an opportunity as the MCI debacle not to be capitalized upon- to say nothing of the shoddy service I have had as a retail customer, the the outright unprofessional demeanor of the wholesale service groups in the 90s. Sprint could have been a great success story of the last few decades, on the order of Google or MicroSoft, if it had been properly managed.

I have had Sprint since 1998 and they have always been good to me, the coverage is great as well. So, if you ask this Sprint customer, I'd say there great.

As a previous employee and now an 8 plus year competitor of Nextel, I speak with experience when I say that Sprint paid to much for Nextel. I agree with several of the above comments that the merger of two different technologies did not make sense and the Nextel customer definitely paid the price. However, Sprint is paying the price for "Poor" or Smart" management on the Nextel and Partner side of the house. Nextel lowered their credit standards and Partner removed their credit, so they could inflate their subscriber numbers. This made Wall Street happy and drove up their respective stock prices; thus, causing Sprint to have to pay a premium for them. You cannot believe that Sprint's churn of mostly iDEN customers was purely from bad customer service. These people just didn't pay their bills. Also, Nextel's high ARPU must be in every part of the US except the SE since the average customer I run into pays $18.00 for PTT and $26.00 for 400 minute integrated plan.

You dead on with your comments. Every consulting company and telcom vendor knows that Sprint has culture issues, can't hire or retain talent. No leadership at all levels. After they spin Nextel, DT or another carrier will buy Sprint and carve it up. No, I am not a disgruntled former Sprinter.

Has anyone herad the rumor that sprint will stop selling aircards in certain areas? this has something to do with their data roaming agreement aith Alltel.

While sprint clearly has customer service issues, they were doing well enough until the aquisition of Nextel a company with numerous technical issues, and a ridiculous pricing structure that put them out of any real competition for the non-commercial consumer. As much as those who have posted here would like to bad mouth sprint and attempt to place blame on sprint as opposed to nextel due to their admittedly atrocious customer service it was lame duck nextel and their rapidly growing debt and diminishing customer base that brought sprint down over the last few years like a two ton anchor. And for those that believe a merger with T-Mobile is a good idea think again. That is insanity that will never happen. First T-mobile is owned by a foreign company and that buyout or merger would make it the largest cellular provider in the nation. Second and more important really is that Tmobile and Sprint are on two completely different types of networks. Think before you say these things people you are just proving your ignorance.

To tell you the truth; i work for a third party vendor call center for sprint and let me tell you the troubles there. More customer complaints than any other carrier around, customers do complain that sprint service is worse and they had it better with nextel. I am a customer care rep and although it is really about the paycheck i get i do take pride in my work with them but it is overshadowed but the incessant customer complaints about service and poor choices in price plans and features.
All this is giong hand in hand to the fact that sprint is losing thousands of customer each day to other carriers because they are simply not happy with anything that is sprint.
In our call center, it is evident, in the fact that sprint is running scared by setting extreme, absurd and unethical rules that change on a daily basis that either get you sent home early because of stats being just slightly lower than what they expect (this does change on a daily basis) and the fact that customer satisfaction is hard to get because of the surveys we rely on as an employee from the customer is not correct at times that it causes us our jobs.
If sprint wants good customer service then they need to stop screwing up customers accounts in the first place and quit having so many network problems that is causing the customers to leave and for sprint to start firing employees because the company cant "get it right".
Honestly, this company needs to go down like the titanic or be bought out by another competitor. The name sprint needs to just be gone so customers can have a enjoyable experience with a telecom company.

I loved Sprint too until I stepped into their "customer service" maze from hell...

I could write a book on my nightmare customer service experience with Sprint.

I'll give you the short version:
1) I made the mistake of buying a Blackberry from a Sprint telemarketer. I travel extensively, and was in need of a new phone so I was actually glad the guy called. He told me that Sprint was offering a special price with rebates galore. Hey, Sign me up! I purchased the phone using a Visa card. The phone I ordered was the wrong one so I went to the Sprint store to exchange it for an upgraded Blackberry World Phone. The store didn't have one in stock, however the clerk kindly handed me their phone to order it from another department. The clerk then did an exchange using my Visa at the cash register, and I my new phone arrived at my home two days later. Cool.

2) Since I'm not exactly a tech-savvy phone genius, I returned to the Sprint store to get some help setting up my new Blackberry. They were marginally helpful; however they got me fixed up nonetheless.

3) I chose the Blackberry World Phone because as I said, I travel extensively. I was leaving for China in a few days and just as I do every month, I dial *3 to pay my Sprint bill. I was a bit shocked when the lovely robo-woman told me that my new balance was $1100.00! As I said, I purchased one phone, exchanged it for another, all on my Visa card. My normal phone bill is around 100.00 per month, and now I'm looking at an $1100.00 phone bill. I called "customer service" immediately to get to the bottom of it.
Oh my God! I spent two days, and a total of 9 hours on the phone dealing with one idiot after another. In two days, I spoke with 29 different people. I was hung up on, mysteriously disconnected with, put on perma-hold, and treated like dirt by these evil mutants employed by Sprint. I was yelled at, threatened, called a liar, insulted in a half a dozen other ways, and still nobody could figure out why my phone bill was $1100.00.

I had only two days to go until I'm on a plane for China, and I'm going through a living hell with Sprint! I was only in the US for a total of four days in between trips abroad. Time that I could have spent with family or friends was consumed by having to deal with Sprint “customer service”.

On the third day, I return to the Sprint store to try to resolve the issue. The manager of the store dialed some kind of secret magical number and handed me their phone to speak with some big chief, or the "king of Sprint", or whatever. The guy was very pleasant, and tried to help me unravel the whole mess. Turns out, I was charged for three phones. They charged my Visa bill, and there were overlapping charges on my Sprint bill. He credited me for part of the damage; however I was told that the credit for $700.00 on my Sprint bill wouldn’t show up until my next monthly statement.

At this point, I was just happy to know that I had a working telephone to take to China, and I was glad to know that the issue was more or less resolved. Had I not been on such a hectic travel schedule, I would have dropped Sprint immediately.

4) One month later: I return from China, dial *3 to pay my Sprint bill, only to hear robo-woman's voice telling me that I'm past due for the amount of $700.00. Now, I've never been late with paying my Sprint bill. In fact, I usually pay early. I've been a loyal Sprint customer for eight years. I didn't use my phone in China, except to answer annoying messages from Sprint which I was receiving daily (Apparently, when you have an open dispute with them, they try to annoy you into submission by hounding you to death across the globe. You can run, but you can't hide!)

So once again, rather than go through another two days of degradation trying to resolve anything on the phone with "customer service", I drive to the Sprint store. During my jet-lagged attempt to get some answers from the guy in the store, I was told that this was somehow my fault because "we told you it would take a month for the credit to show up on your statement". He also suggested that I pay the bill, even though I don't owe them money, and wait until yet another month goes by for the billing department to straighten it out. Rather than get violent with the guy, I marched out of there and promptly called "customer service" again to see if I could find some answers.

Finally, I get someone who isn't on drugs to speak with. The "supervisor" more or less got it straightened out. It's been almost three months, and I'm still waiting for that rebate. Never did get that "special offer". After the mental anguish Sprint put me through, they should give me free phones and free service for life. I would drop Sprint, however I'm in China again this month, and I’m heading to Italy after Christmas. As grueling as my travel schedule is, I don't have time to change service right now. Whenever I can take a break, dropping Sprint is high on my to-do list!

Funny side note:

While I was in China last month, I realized that I forgot to call Hertz before I left to reserve car to upon my return to the States. Since I really didn’t know how to dial US directory assistance from China to get the number for Hertz Rent-A-Car, I called Sprint to ask “customer service” for help. I explained to the woman that I was in China trying to reach directory assistance in the US so I could make a rental car reservation. The woman at Sprint “customer service” responded by yelling “Sir, we are not a travel agent”, and then hung up on me.

… At least they’re consistent.

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