Surprising few investors or telecom-industry watchers, The Wall Street Journal is reporting that Sprint Nextel
The third-largest wireless service provider has been taking its lumps over the past few years; its merger with Nextel has gone about as well as a dinner party between the Hatfields and the McCoys. Forsee engineered the $35 billion takeover of Nextel late in 2004, aiming to combine Sprint's widespread cellular coverage and spectrum assets with Nextel's premium base of high-paying subscribers.
The companies hoped to merge the two technologies Sprint and Nextel used (CDMA and iDEN, respectively) to create an extensive suite of best-of-class services. But the integration hasn't gone as well as the press releases hoped and hyped. Complaints from Nextel customers increased dramatically as Sprint struggled to maintain quality on a stressed network, and the defections to other providers such as AT&T
The ongoing issues in the commingling of Sprint and Nextel's businesses illustrate the uncertain nature of large corporate mergers. While AT&T has been relatively successful in blending Cingular, SBC, and the old version of its namesake, other telecom mergers haven't gone so well. Alcatel-Lucent
Picking up the pieces of fallen giants isn't easy, either. Motorola
One way or another, Sprint Nextel needs to do something, lest the company fall farther behind its peers in a newly invigorated competitive environment.