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Friday, February 29, 2008

Sprint Becomes Poster Child - How to Run a Perfectly Good Business into the Ground

Sprint made it official this week.  They have officially run Nextel into the ground.  Nextel, used to be a great example of how a cell phone company could provide best in class products and services to business users.  The combination of a cell phone company partly owned by a cell phone manufacturer (back in the days when Motorola was still considered a 'manufacturer') created that unique combination of good technology and good service.

Sprint came in and purchased Nextel for about $36 billion dollars.  Sprints extremely poor reputation among business class cell phone users (quite a few of which had dumped Sprint to go to Nextel in the first place) created a panic and shortly there after an exodus. 

Sprint's purchase and operation of Nextel chased away 683,000 wireless customers!

Sprint may have been bigger than Nextel and Nextel's technology may have been in need of a rejuvenation, but Sprint was neither better nor rejuvenating and now Sprint shareholders are paying for that bad move.  Some cultures just do not mix.  Its would be akin to watching Super 8 hotels try and by the Wynn.  Sprint would have been better off gambling with fast food, or music downloads or even peddling a plasma lift to aging baby boomers, but not trying to run Nextel.

Sprint Nextel Corp., the third- biggest U.S. wireless carrier, posted a $29.5 billion loss and scrapped its dividend after writing down the value of Nextel Communications Inc. and losing 683,000 customers. U.S.