At&t and Sprint Merger and Organizational Change
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AT&T and Sprint both pursued major mergers in 2005 in an attempt to become the top wireless provider in the US. AT&T merged with Cingular Wireless, gaining over 46 million subscribers, while Sprint merged with Nextel Wireless. Both mergers aimed to increase market share, but Sprint struggled with cultural clashes between the companies that hindered innovation. In the following years, AT&T benefited from exclusive deals with the iPhone, while Sprint declined in customer service quality. Now, Sprint is trying to recover by selling off the Nextel portion and merging with Softbank, while AT&T remains a top competitor through network performance.
At&t and Sprint Merger and Organizational Change
- 1. AT&T and Sprint A race to become the nation’s top wireless provider
- 2. Home Screen O A merging market: AT&T/Cingular & Sprint/Nextel merge O Winners and Losers: Who reaped the benefits??? O Why did we lose? Sprint-Nextel Friction and Finger pointing O Where’s the opportunity for improvement O Who has the brighter Post- merger Future???
- 3. A Merging Market O In 2005, AT&T and Cingular Wireless completed a $41 billion dollar deal, becoming the nation’s largest wireless carrier in terms of subscribers. O Cingular brought along more than 46 million subscriber's; becoming a profitable asset to AT&T and surpassing its biggest competitor, Verizon Wireless. O In 2005, Sprint and Nextel Wireless inked their merger as well, becoming a serious contender in the consumer wireless market. O Nextel, much like Cingular, brought a new set of subscribers to Sprint. The companies’ wildly popular “Walkie Talkie” cellphone on the “Push to Talk” network became Sprint’s major cash cow at the time.
- 4. Winners and Losers: who reaped the benefits? AT&T O opening access to both the Cingular and AT&T Wireless GSM networks to further improve coverage, allowing customers of both companies to use the new, combined network without roaming charges. O Shortly after their merger, Apple’s IPHONE was exclusively on AT&T’s network. This increased their revenue within the wireless marketplace. O Nextel did not deliver nearly the number of subscribers that Sprint was eagerly anticipating. O The distinct differences in business cultures and plans for the company from the CEO’s all the way down to their staff members became toxic; leading to a lack of consistent leadership and a unrealized company vision. O Sprint, back in early 2008, passed up on a deal to bring the IPHONE to Sprint’s network; a self-inflicted mistake. Customers had the ability to utilize both companies cellular networks for no additional charges. O SPRINT
- 5. Sprint and Nextel: “A match not made in heaven”. The CEO of Sprint, Dan Hesse, was unable to get the CEO of Nextel to compromise in terms of his role within the company after the merger was approved. This problematic business culture facilitated itself from the top of the organizational level down to the bottom. Consumers were complaining about the poor customer service quality and subsequent lack of innovation with regards to Sprint’s cellphone inventory. In fact, Gary Burcham, CEO of the Missouri Bank and Trust co. stated that “Ten years ago, that was the phone of choice for our customer base. Now, I don’t see them”.
- 6. Where’s the Opportunity for improving? O AT&T is not resting. They’re relentless and determined to become the nation’s top wireless provider. O AT&T almost struck another huge merger with the company, T- Mobile but the deal was not approved by member of the U.S. Congress; citing the companies’ aspirations of becoming a technological oligarchy. O Sprint, on the other hand, is trying to rehabilitate their tarnished image after the distasteful merger with Nextel. O Sprint is making strides towards doing just that. Just recently, the company is working on offloading the Nextel portion of the company to Japanese wireless company, Softbank for an estimated $20 billion.
- 7. Who will have a brighter future??? Only time will tell. AT&T and Sprint have already come a long ways regarding their profitability and customer base after merging with Cingular and Nextel. AT&T is a close second to Verizon Wireless regarding cellular and data network performance. Sprint is a distant third but can gain tremendous ground on both companies if their upcoming merger with Softbank is agreed upon and approved. This will eliminate a lot of the toxic waste that has been holding the company back for quite some time. A brighter future is ahead for AT&T and Sprint if they are innovative and consumer savvy enough at figuring out what will keep them signing up for more in years to come.
- 8. REFERENCES O O O O O O O O Pasternak, Laura. A plan for the brand. Communications World. Pgs. 32-34. (Jul-Aug 2012). Smith, Barbara-Fagan; Skelton, Ruta. Practical tips for merger communication. Roi communication. Pgs.1-3. (2012). Solheim, Shelley. Cingular Nation? E-Week News and Analysis. Pg.40. (Dec.2004). McGuire, Russ. McGuire’s Law: The value of any product or service increases with its mobility. Word Press. Pg.1 (2011). http://mcguireslaw.com/russ-mcguire/ The 7S Model and change: Increasing your chance of organizational success. Educational Business Articles.(2012). http://www.educational-business-articles.com/7smodel.html Haryanto, Andry. Sprint Nextel Merger Analyzed using Organizational Metaphors. Scribd. Pgs. 1-21. (Apr-2008). http://www.scribd.com/doc/2621922/Sprint-Nextel-MergerAnalyzed Anderson, Lisa. Merger and Acquisition: Integration key to Success. LMA Consulting Group. (2012). http://www.lma-consultinggroup.com/article_ma.html Whitacre, Edward. (Testimony). Testimony of Edward E. Whitacre Jr. United States Committee on the Judiciary. (Jun-2006). http://www.judiciary.senate.gov/hearings/testimony.cfm?id=e655f9e2809e5476862f7 35da1172414&wit_id=e655f9e2809e5476862f735da1172414-1-1.
- 9. REFERENCES O O O O O O Davis, Mark. Sprint plans for end of Nextel push to talk network. The Kansas City Star. (Jun-2012). http://www.kansascity.com/2012/06/18/3664694/sprint-plans-for-end-ofnextel.htm Richman, Barbara. Face to Face communication can help you accomplish business objectives. Memphis Business Journal. (Aug 2012). http://www.bizjournals.com/memphis/print-edition/2012/08/17/face-toface-communication-can-help.html?page=all. Burton, John; Doyle, Sheena; Stone, Kathryn. Message Received? Community Care; 5/1/2003, Issue 1470, p44. Twiddy, David. Sprint Affiliate sues over Virgin deal. The Seattle Times. (Sep2009). Carr, Housley. Designers expect a flurry of work as major Wireless Players Merge. ENR: Engineering News-Record; Sourcebook, Vol. 254 Issue 25A, p83-84 (Jul-2005). Palmer,Ian; Dunford, Richard and Akin, Gibb. Managing Organizational Change. Second edition. Ch.2. Pg.24 (Jan 2008)
- 10. QUESTIONS???