Sprint

Sprint. I think I can say that we all recognize them as the multi-billion dollar Fortune 500 telecommunications company. In 2019, more than 50 million customers relied on their wireless service, meaning many of the people watching this have dealt with them directly. Then, the following year, they were officially bought by their competitor T-Mobile in a $26 billion deal. T-Mobile has since ended the brand, shut down the network, and effectively, Sprint no longer exists. That is strange to think about. One of the big four wireless carriers that have been around my entire life is just not there. And I can tell you that this company was not doing very well. In fact, many analysts believe that if the acquisition had not happened, they were For well over a decade, they have been losing money, struggling to maintain customers. People don't even How about this? The American Customer Satisfaction Index, after a survey of about 20,000 people, ranked Sprint as, by far, the lowest of the big four wireless carriers. There has been a lot happening here. Most of it fairly complicated, so forgive me for not talking about everything, but I think you'll agree that Sprint has had an interesting and impactful history. So for this video, I want to talk about how everything got so big and where everything went so bad. This company, amazingly, has roots going back to the 1800s, technically predating Alexander Graham Bell's patent for the telephone itself. It basically started as part of a railroad. See, the South Pacific company installed telegraph lines along the railroad tracks so the dispatchers can communicate with the engineers that were later transformed into telephone lines. See, for about a century, AT&T pretty much had a monopoly over all parts of the telephone industry, but in the 1980s, the government forced them to divest their local telephone companies and that started shaking things up. I have a video detailing what happened with all of it, but the relevant part here is that with these local phone service providers, the customers were now allowed to choose their long distance carrier. It wasn't just automatically AT&T anymore. Logically, many companies saw an opportunity and it created a bit of a frenzy in the long distance markets. It motivated South Pacific to use their existing lines to establish a long distance network that they cleverly named South Pacific Railroad Internal Network Telecommunications, or more simply, Sprint. You may already know that due to the expensive infrastructure and all the benefits of scaling operations, the telecommunications industry is all about mergers and acquisitions and this right here is no exception. I think the story of Sprint can be effectively told by highlighting some of the major ones, starting in 1982 when that original Sprint network was bought by GTE. They were the owners of 16 local phone companies and since those local phone companies would have to connect to the long distance lines to connect the long distance calls, the idea was that they would now get the benefit of controlling both parts of that. Then in 1986, that combined company merged with United Telecom to create a 50-50 joint venture that was later fully acquired by United Telecom in 1992 when at the same time the name of everything was simply changed to Sprint. Now United Telecom amazingly also went back to the 1800s. It was started as the Brown Telephone Company named after the founder meant to be a local alternative to AT&T in the small town of Abilene Over the years, it grew to serve more markets, acquired other local providers, changed its name a few times and by the time of this deal, it was a multi-billion dollar company that had invested heavily in establishing an advanced 23,000 mile fiber optic network for its long distance calls. Do you see what was happening here? Neither one of these companies were profitable when they came together and they only combined for 4% of the US long distance market that was still heavily dominated by AT&T, but they were investing in their infrastructure and scaling the business in hopes of establishing something that can slowly grow to be profitable and chip away at&T's ridiculous share of the markets. And that is what they did. By the end of the 1980s, they were attracting enough customers to finally turn a profit. For Sprint, it was all about that fiber optic network. It was their big selling point because no major competitor, including AT&T, was using that technology. They adapted a new logo featuring horizontal lines that were meant to represent the fiber optics and featured it in an effective ad campaign where a pin was famously dropped next to a telephone, saying that the fiber optics made it possible to hear even that little sound all the way on the other end of the phone line. Another important merger happened in 1993 when Sprint came together with Centel, making them the first major company to provide local, long distance, and wireless services. That right there was Sprint's first major introduction into wireless services, which obviously became a huge part of the industry. By the mid-2000s, Verizon Wireless and Singular both had over 40 million customers, in part because Singular had just acquired AT&T Wireless. In 2005, they bought the wireless company Nextel for $35 billion. They changed the name of the company to Sprint Nextel, and they adopted a new yellow logo that I think we all recognize, considering they continued using it up until the end. I know this deal sounds Honestly, this entire video could be about how Sprint and Nextel did not work well together. They used separate technologies so they couldn't really see any benefits from combining the networks, and that resulted inefficient infrastructures and poor customer service. Their corporate cultures were practically opposites. Nextel was fast-moving and energetic, while Sprint was your traditional conservative phone company. They had a lot of trouble with affiliates. Sprint had granted them the exclusive rights to sell things under the Sprint brand name in certain markets, but then Sprint started selling Nextel products in those markets, which was sketchy. It led to multiple lawsuits that, in many cases, Sprint believed that it would be easier just to buy the affiliate rather than dealing with the lawsuits, so they spent almost $15 billion doing that in the years following the acquisition. Even the marketing didn't work. They continued selling things under both the Sprint and Nextel brands, so when they started advertising them as Sprint together with Nextel, it was confusing. Many of the Nextel executives left the company, and the CEO resigned in 2007 once everything started going bad. If you had bought $100 of stock in this company at the end of the acquisition year, you would have less than $20 of it remaining five years later. In 2008, they recorded a good will impairment of almost $30 billion, essentially saying that Nextel did not hold its value, and that most of the $35 billion that they had paid for it a few years earlier wasted money. In 2013, they officially ended the Nextel network and dropped Nextel from their name, when that year they were mostly acquired by a Japanese company called SoftBank. It was actually the largest foreign acquisition by a Japanese firm, paying a little more than $20 billion for it, which is obviously a lot of money, but I want to point out that Nextel itself was acquired for $35 billion, not even accounting for the Sprint part, so that shows how much value they had lost over that time. And to go a step further with that, back before Nextel was ever even involved in 1998, a competitor of theirs, Worldcom, was on a bit of an acquisition spree and offered to pay $115 billion for Sprint. It was blocked by the Department of Justice for fear of reduced competition in the market and was seemingly an inflated price tag I think I'm safe in saying that Sprint developed the worst reputation of any major wireless carrier. In 2017, they were listed as n I fully recognize that there may be some former Sprint customers watching this that will dispute that, and I'm open to hearing about it, but I'm going to guess that far more of you are already nodding your head in agreement. It is said to say that theirs. I think I'm safe in saying that Sprint developed the worst reputation of any major wireless carrier. In 2017, they were listed as n I fully recognize that there may be some former Sprint customers watching this that will dispute that, and I'm open to hearing about it, but I'm going to guess that far more of you are already nodding your head in agreement. It is said to say that because this is Sprint we're talking about. Back when everyone was concerned with long distance, they were known for their superior fiber optic pin dropping 10 cents a minute ahead of their time network, but now sadly when it comes to wireless, it is a completely different story. Again, going back to the American Customer Satisfaction Index, in 2019, a survey that focused only on the quality of the network also placed Sprint well behind the other major providers. Though I feel I do need to point out that despite being a multi-billion dollar Fortune 500 company with over 50 million subscribers, Sprint was actually the smallest of the major providers, so it would make sense that the smallest company would have the worst network, but there are obviously bigger reasons behind it as well. Obviously, that next L acquisition took up so much time and money that I'm sure you'll agree it should have been spent on developing and improving the network. Also, when developing a new 4G technology, Sprint wasting even more money by investing to develop YMAX instead of LTE that later became the standard. I can't say I know much about the specifics of the technologies, but their YMAX network shut down in 2015, essentially meaning that they placed their bet on the wrong technology. Near the end, Sprint was continuing to gain new customers while losing many of the existing ones, which makes it seem In 2014, Sprint actually tried to buy T-Mobile, again there were regulatory issues, but four years later, it was allowed to happen the opposite way in a deal that took about two years to finalize. To get approval, Sprint had to sell their prepaid businesses to Dish Network for $1. 4 billion that included Virgin and Boost Mobile. At this point, I hope it's making sense why a deal After being so successful and memorable in the long-distance market, they made some costly mistakes when transitioning to wireless from which they were never quite able to recover. Let me know in the comments, what do you think about Sprint? Again, there's a lot to respect in the early years considering what they did with long-distance and even going back to the 1800s and how they grew while establishing the infrastructure, but that next deldeal was such a bad decision. Do you believe that most of their problems stem back to that or are there other factors that I should be giving more attention? Also, to the previous customers of Sprint, what do you think of them? Do they deserve to be on those lists of the most hated companies or was your experience more pleasant? In any other thought you have about Sprint, leave them in the comments. I'd