Sprint Corporation
Sprint Corporation was an American telecommunications company. Before being acquired by T-Mobile US on April 1, 2020, it was the fourth-largest mobile network operator in the United States, serving 54.3 million customers as of June 30, 2019. The company also offered wireless voice, messaging, and broadband services through its various subsidiaries under the Boost Mobile and Open Mobile brands and wholesale access to its wireless networks to mobile virtual network operators.
In July 2013, majority ownership of the company was purchased by the Japanese telecommunications company SoftBank Group. Sprint used CDMA, EvDO and 4G LTE networks, and formerly operated iDEN, WiMAX, and 5G NR networks. Sprint was incorporated in Kansas.
Sprint traced its origins to the Brown Telephone Company, which was founded in 1899 to bring telephone service to the rural area around Abilene, Kansas. In 2006, Sprint left the local landline telephone business and spun those assets off into a new company named Embarq, which later became a part of Lumen Technologies under the CenturyLink brand, which remains one of the largest long-distance providers in the United States.
Until 2005, the company was also known as the Sprint Corporation, but took the name Sprint Nextel Corporation when it merged with Nextel Communications and adopted its black and yellow color scheme, along with a new logo. In 2013, following the shutdown of the Nextel network and concurrent with the acquisition by SoftBank, the company resumed using the name Sprint Corporation. In July 2013, as part of the SoftBank transactions, Sprint acquired the remaining shares of the wireless broadband carrier Clearwire Corporation that it did not already own.
In August 2014, CEO Dan Hesse was replaced by Marcelo Claure. In May 2018, Michel Combes replaced Claure, and had been working to get Sprint's acquisition by its rival T-Mobile through regulatory proceedings.
On April 1, 2020, Sprint Corporation completed their acquisition by T-Mobile US, which effectively made Sprint a subsidiary of T-Mobile until the Sprint brand officially discontinued in the beginning of August. Leadership, background, and stock changes happened immediately, with customer-side changes happening over time. The Sprint brand officially discontinued on August 2, 2020. Billing was already showing the T-Mobile brand, and on this date all retail, customer service, and all other company branding switched to the T-Mobile brand. New rate plans were also introduced as well for all new and existing customers from both companies, though all will be grandfathered into their current plan for at least 3 years should they choose not to switch to a new T-Mobile plan. Customers with Sprint accounts were fully migrated to T-Mobile in the summer of 2023 officially discontinuing the Sprint brand.
History
Early years
The Sprint Corporation traces its origins to two companies, the Brown Telephone Company and Southern Pacific Railroad.Brown Telephone Company
Brown Telephone Company was founded in 1899 by Cleyson Brown, to deploy the first telephone service to the rural area around Abilene, Kansas. In 1911, C. L. Brown consolidated the Brown Telephone Company with three other independents to form the United Telephone Company. C. L. Brown formed United Telephone and Electric in 1925. In 1939, at the end of the Great Depression, UT&E reorganized to form United Utilities.In 1964, Paul H. Henson became president of United Utilities; two years later, he was named chairman. When Henson began working at the company in 1959, it had 575,000 telephones in 15 states and revenues of $65 million. Henson is credited with creating the first major fiber optic network, having recognized it as a way to handle more calls and provide better quality sound.
In 1972, United Utilities changed its name to United Telecommunications. In 1980, United Telecommunications began working on a 23,000 mile fiber optic network for long-distance calls. In 1989, this long-distance business became profitable for the company for the first time. In 1990, Henson retired from United Telecommunications; by this time the company's revenues had grown to $8 billion.
Southern Pacific Communications and introduction of Sprint
Sprint also traces its roots back to the Southern Pacific Railroad, which was founded in the 1860s as a subsidiary of the Southern Pacific Company. The company operated thousands of miles of track as well as telegraph wire that ran along those tracks. In the early 1970s, the company began looking for ways to use its existing communications lines for long-distance calling. This division of the business was named the Southern Pacific Communications Company. By the mid 1970s, SPC was beginning to take business away from AT&T, which held a monopoly at the time. A number of lawsuits between SPC and AT&T took place throughout the 1970s; the majority were decided in favor of increased competition. Prior attempts at offering long-distance voice services had not been approved by the U.S. Federal Communications Commission, although a fax service was permitted.In the mid-1970s, SPC held a contest to select a new name for the company. The winning entry was "SPRINT", an acronym for "Southern Pacific Railroad Internal Networking Telecommunications".
Consolidation and renaming to Sprint Corporation
In 1982, it was announced that GTE Corp. had reached an agreement to buy SPC's long-distance telephone operation, including Sprint. The deal was later finalized in 1983.In 1986, GTE Sprint merged with the United Telecommunications Inc. property, US Telecom. The joint venture was to be co-owned by GTE and United Telecom named US Sprint Communications. The new entity also included communications firm GTE Telenet, and United Telecom Data communications Co.,. In 1988, GTE sold more of Sprint to United Telecom, giving United Telecom operational control of the company. United Telecom announced it would complete its acquisition of US Sprint on April 18, 1990. United Telecom later officially changed its name to Sprint Corporation to capitalize on its brand recognition.
Expansion to Canada
Sprint Corporation entered the Canadian market in the early 1990s as a reseller of bulk long-distance telephone lines that it bought from domestic companies. Under Canadian foreign ownership regulations, Sprint could not open its own network. In 1993, Sprint entered into a strategic alliance with Call-Net Enterprises, a Canadian long-distance service provider, and bought 25 percent of the company. Call-Net's long-distance service was renamed "Sprint Canada" and expanded to include landline and internet services. In 2005, Call-Net and Sprint Canada's 600,000 customers were acquired by Rogers Communications.Return to wireless
In March 1993, Sprint merged with Chicago's Centel Corp. Centel remained in the Chicago area and was renamed Sprint Cellular Co. In 1994, Sprint spun off their existing cellular operations as 360° Communications to comply with an FCC regulatory mandate. In 1998, 360 Communications was acquired by Alltel, which was in turn acquired by Verizon in 2009.In 1994, Sprint announces plans for a powerful new venture with three of the nation's major cable television companies, Tele-Communications Inc., Comcast Corp. and Cox Cable. The four companies outline plans to build a nationwide network to provide wireless personal communications service, and also affirm their support for a single integrated offering of wireless, local telephone and long distance services in a package with cable television service
In 1995, Sprint and its cable television associates entered into a partnership with American Personal Communications to create a digital wireless network. In November 1995, the company began to offer wireless service under the Sprint Spectrum brand in the Baltimore-Washington metropolitan area. This was the first commercial Personal Communications Service network in the United States. Although the Sprint PCS service was CDMA, the original Washington-area network used GSM. Eventually, Sprint launched its new nationwide CDMA network, then in 1999 sold the decommissioned GSM infrastructure to Omnipoint which re-launched in May 2000. Omnipoint was later acquired by VoiceStream Wireless, which like Sprint would eventually be acquired by T-Mobile.
Partnerships and more consolidation
In September 1996, Sprint announced a deal with RadioShack, and in 1997, Sprint stores opened at RadioShack to offer communications services and products across the United States.On October 5, 1999, Sprint and MCI WorldCom announced a $129 billion merger agreement between the two companies. The deal would have been the largest corporate merger in history at the time. However, due to pressure from the United States Department of Justice and the European Union on concerns of it creating a monopoly, the deal did not go through.
In 1999, Sprint began recombining its local telecom, long-distance, wireline, and wireless business units into a new company, in an initiative known internally as "One Sprint". In April 2004, the separately traded wireless tracking stock PCS was absorbed into the New York Stock Exchange FON ticker symbol, Sprint's former ticker symbol. This was challenged in many lawsuits by Sprint PCS shareholders who felt their stock was devalued because it was trading at the ratio of 1 share of PCS stock for 1/2 share of FON stock. The PCS shareholders claimed a loss of 1.3 billion to 3.4 billion dollars.
Merger of Sprint Corporation and Nextel Communications
On December 15, 2004, Sprint Corporation and Nextel Communications announced they would merge to form Sprint Nextel Corporation. The merger was transacted as a purchase of Nextel Communications by Sprint Corporation for tax reasons; Sprint purchased 50.1 percent of Nextel. At the time of the merger announcement, Sprint and Nextel were the third and fifth leading providers in the U.S. mobile phone industry, respectively.Sprint shareholders approved the merger on July 13, 2005. The merger deal was approved by the U.S. Federal Communications Commission and U.S. Department of Justice on August 3, 2005. Sprint Nextel was formed on August 13, 2005, when the deal was completed.
Sprint and Nextel faced opposition to the merger, mostly from regional affiliates that provided wireless services on behalf of the companies. These regional affiliates felt that the new company would hinder competition.
On September 1, 2005, Sprint Nextel combined plan offerings of its Sprint and Nextel brands to bring uniformity across the company's offerings.
Nextel has licensed its identity to NII Holdings, Inc., of which Sprint Nextel owned 18%. NII has used the Nextel brand to set up networks in many Latin American countries. Following Sprint's purchase of Nextel, Nextel sold all of its investment in NII Holdings.
The integration process was difficult due to disparate network technologies. Sprint tried to address this with the advent of PowerSource phones. These phones routed voice call and data services over Sprint's PCS spectrum while maintaining DirectConnect services over 800 MHz spectrum. However, this was not sufficient in coverage, due to the inability to roam on a non-PCS spectrum. Top Nextel Executives began leaving the company immediately after the merger closed. Tim Donahue, the Nextel CEO, stayed on as executive chairman, but ceded decision-making authority to Gary D. Forsee. Tom Kelly, COO of Nextel, took an interim staff position as Chief Strategy Officer. Two years after the merger, only a few key Nextel executives remained, with many former Nextel middle- and upper-level managers having left, citing reasons including the unbridgeable cultural difference between the two companies.
In 2006, Sprint spun off its local telephone operations, including the former United Telephone companies and Centel, as Embarq.
Sprint's acquisition of Nextel was a disaster from a fiscal standpoint in 2008, the company wrote down $29.7 billion of the $36 billion sum it had paid for Nextel in 2005, wiping out 80 percent of the value of Nextel at the time it had been acquired. The write down reflected the depreciation in Nextel's goodwill since the date of acquisition.