ANALYSIS OF SPRINT AND
NEXTEL MERGER IN AUGUST 2005
TABLE OF CONTENTS
EXECUTIVE SUMMARY iii
INTRODUCTION 1
ANALYSIS OF MERGER 2
BEFORE THE MERGER 2
AFTER THE MERGER 4
CUSTOMER SERVICE SURVEY 9
CONCLUSIONS 13
RECOMMENDATIONS 14
APPENDIX 16
LIST OF FIGURES
FIGURE 1. 2005 TIMELINE OF SPRINT/NEXTEL LEGAL ISSUES 6
FIGURE 2. MARKET SHARE 7
FIGURE 3. CURRENT SPRINT/NEXTEL CUSTOMERS 9
FIGURE 4. REASON(S) FOR LEAVING SPRINT/NEXTEL AFTER MERGER 10
FIGURE 5. SATISFACTION OF CURRENT SPRINT/NEXTEL CUSTOMERS 11
FIGURE 6. CHANGE IN CUSTOMER SATISFACTION POST-MERGER 12
EXECUTIVE SUMMARY
Purposes of the Report
The purposes of this report are to (1) address the problems Sprint and Nextel incurred before the merger, (2) discuss
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In a $35 billion deal, Sprint Nextel prides itself on being able to provide innovative services and technology to a wide range of consumers, business associates, and government officials. Although Mr. Forsee has said, “This merger positions Sprint Nextel for greater success than either company could have achieved alone," there are many obstacles that Sprint Nextel must overcome in order to become the leading cell phone network provider. First, one must examine the problems with Sprint and Nextel before the merger.
ANALYSIS OF MERGER
Before the Merger
Before Sprint acquired Nextel, Sprint was ranked as the nation’s third largest wireless company as well as the third leading carrier in long-distance service (Sprint-Nextel Deal?, 2004). However, there have been many complaints against the company. For example, the company has been accused of billing problems, unauthorized charges, and rude, unhelpful customer service. Moreover, there have been complaints about coverage service areas and roaming. On the Consumer Affairs website, Sprint customers have written about their experiences with the company. In October 2002, a man from Lafayette, LA, expounds upon a time when Sprint’s customer support changed his calling plan to better suit his needs in his current situation. They had promised to a hold plan for
This means that the next 3-5 years for the company, currently known as Sprint, looks promising. The merger may not create perfect business conditions for the company, but financial improvements will appear evident and Sprint’s legacy is likely to survive. However, if the merger does not go through, Sprint Corporation is still at-risk for closing its doors within the next couple of years. If Sprint does not merge with T-Mobile, and the executive leaders fail to develop effective strategies to revive its current financial situation, I am predicting that Sprint Corporation will no longer exist in the near
The generation of talking face-to-face is slowly fading away, and the technology era is going to keep on growing. One of the most widely used technology services known today is the cellular phone industry. According to the Pew Research Center’s website, 90% of American adults own a cell phone. Of that 90%, the smartphone ownership is at 64% (2013). Verizon Wireless, along with the other major carriers, T-Mobile, Sprint, and AT&T, have taken this data and comprised a growing industry where competition arises from all angles. These companies have battled one another on pricing, plans, and customer service for many years in order to stay on top. Unfortunately, these are major factors in whether or not a customer will choose the particular company over another.
After reviewing all the items previously mention, Verizon appears to be in a much better financial position then does Sprint. Cash flow and cash on hand also would indicate that Verizon is in better financial position. One reason is because Sprint issued more stocks ($18M) which indicates they are in need of more capital / liquid assets. With a negative net income it is easy to see that Sprint is not performing near as well as Verizon. This is important to consumers as well as investors. With cellular companies trying to expand to meet the ever growing data needs of the consumer and their desire to sign customers to long term contract, consumers will want to know that the provider
In my opinion I think Verizon has better coverage because of its reliability index is 83.4 and its speed index is 75.7 witch is over AT&T, Sprint or T-Mobile and also a better network coverage. Here are some reasons why I think Verizon is better than Sprint.
This is in response to the above-referenced complaint filed by Ms. Michelle Motz. In her complaint, Ms. Motz state she has not received adequate service and has not sufficiently compensated on her account. Furthermore, her phone hangs up on important calls repeatedly, adds applications without her consent and uses up her data. Ms. Motz requests assistance with this matter.
Verizon and sprint are both on different path with Verizon firmly establishing itself as the king of the air waves and sprint on the verge of financial chaos. Their relationship with their employee come with a surprise as Verizon posted one of the largest strike in in this decade when 40,000 employee walk off their job and started a very controversial strike which has been waited in by many on the cause and outcome. To say the least this, show there are issues to be dealt with it employee relationship. Investor can will also see this as a sign that there is a possibility for customer service issues to arise. Verizon is very capable of shouldering a very huge financial load but the recent event of the strike could cause many potential future
In comparing the annual reports of Sprint and Verizon to judge differences in communication style, there are a few things to note. Verizon’s annual report was very visually pleasing and was easy to read and follow. The style was clean, and had a good use of photos. It also utilized a crisp white, red, and gray palette as well as several areas highlighted by infographics. The intended audience is the shareholder, but an interested student or customer would find it a document that is user-friendly. Conversely, Sprint’s annual report filing was more intimidating. It was done in the standard format used to report to the SEC and over 200 pages to
As the telecommunications industry in the United States consolidated and regional ‘Baby Bells’ began to amalgamate, Bell Atlantic, GTE, and Vodafone AirTouch merged in 2000 to form the nation’s largest wireless company, Verizon Wireless (Verizon, 2013). After establishing its headquarters in Basking Ridge, New Jersey, Verizon Wireless launched its foundational strategy of differentiating itself from the competition by building and maintaining a superior network and delivering an exceptional customer experience through its products and services (Strigl & Swiatek, 2011). As a result, Verizon established itself as the recognized industry leader in wireless and has maintained its network advantage by being the first wireless company in the United
Virgin Mobile is looking to launch a new cell phone service in the US marketplace, which is already a highly saturated industry. This analysis will help select a pricing strategy that attracts and retains subscribers, while still maintaining a competitive edge within the industry. The cell phone industry has many sources of customer dissatisfaction. For instance, customers’ distrust in pricing plans due to confusing usage rates; companies’ inconvenient and inconsistent off-peak hours; service provider’s hidden fees that include taxes and higher rates after minutes are used up, universal service charges, and one-time costs; and binding contracts by the service
Verizon Wireless is the result of “one of the largest mergers in U.S. business history” between Bell Atlantic Corp. and GTE Corp. on June 30, 2000” (History and Timeline. Verizon 2017). Even though “Verizon was ranked #1 in three out of four regions for residential internet service, #1 in six out of six regions surveyed for wireless, and #1 overall among U.S. large-business customers” in 2016, there was unrest in the organization (Building a Connected World 2016).
Verizon is a major telecommunication provider in the United States. The company is the market leader, with $110 billion revenue and $2.4 billion in profit (MSN Moneycentral, 2012). Verizon has steady revenue streams that are largely based on a subscription model. It has several business segments, including wireless (63.3% of revenues) and wireline (36.7%) (2011 Verizon Annual Report). Most of this report will therefore focus on the wireless business, not only because this is the largest business that the company operates but because it is a rapidly growing and evolving business as well, a function of the rapid pace of smartphone adoption in America.
In a recent article by the Washington Post, Charter has recently acquired the rights to Time Warner Cable (TWC) in a $55 billion dollar deal (Kang). This comes a few weeks after Comcast, a close competitor withdrew it’s own merger deal after a potential. The article states that the merger between Charter and TWC creates a viable competitor to Comcast which currently has 40 percent of all broadband internet subscribers. With the merger the article states that the company New Charter, would have a 35 percent share of the current broadband market, compared to Comcast which would have had more than 50 percent.
Ivan Seidenberg has been in a key leadership role at Verizon since 2000 (Anonymous, 2011). While in his leadership role, Ivan Seidenberg has led Verizon into a global network and Verizon has built out their network into a nationwide industry (Anonymous, 2011). Ivan Seidenberg is sixty three years old and has a bachelor’s degree in math and a master’s degree in business administration (Anonymous, 2011). Prior to working with Verizon, Ivan Seidenberg was a chairman and chief executive officer of NYNEX and Bell Atlantic (“2010 Fortune 500”, n.d.). Ivan Seidenberg created Verizon by combining Bell, NYNEX, GTE, and MCI. He also created Verizon Wireless by combining Bell Atlantic, GTE, and Vodafone Air Touch (Anonymous,
In developing a new cellular network, Verizon was able to raise the benchmark for cellular service across the country. According to a press release by Verizon, chief operating officer Lowell McAdam stated that, “we are driven by the vision to provide ubiquitous wireless broadband connectivity to rural and urban Americans alike … we will reach more than one third of all Americans where they live, right from the start” (Verizon 2012). In the ever-growing technological society, consumers want information faster than ever. Verizon was able to give this to the consumer with a faster
As a technology company, Verizon Communications Inc. has gained national recognition as being the #1 telecommunications network in America. This company has truly flourished, and expanded its services throughout the country, putting them in the lead of the telecommunications industry. Verizon started its true foundation in New York, but became incorporated in Delaware. The company was formed on June 30, 2000 by the merger of Bell Atlantic Corp and GTE Corp; this merge created a change in the telecommunication world, which is now called Verizon. (Cor, Por)