Sprint Nextel

Sprint/Nextel

The purpose of this paper is to discuss the issue confronting Sprint due to tight competition in the telecommunication industry. This paper will also discuss how Sprint responded to the issue, and the outcome of the company’s response to the issue. Sprint is the third largest wireless telecommunications network in the United States, behind AT&T and Verizon Wireless, based on total wireless customers.

Issue Identification

In 2007, there was a decline in subscribers’ numbers. As a result investors were not happy over the company’s overall performance. CEO Gary Forsee stepped down as chairman and chief executive in October, 2007. Sprint management has developed strategic plan to achieve growth and profitability. It has to steal customers from competitors. To attract new subscribers, it has to introduce a new innovation that no other competing company has introduced in the market before. Sprint planned the introduction of a new wireless network using a technology called WiMax. The total commitment of the company to spend for the coming three years to build the network is $5 billion, approximately $2B to be spent in 2008 with a goal for this new technology to cover approximately around 100 million people by the close of the year. This move maybe unnecessary, and dangerous for the company considering its struggling status for the past three years due to its $36 Billion merger with Nextel. In the fourth quarter of last year, 2007, Sprint experience a net loss of more than 100,000 customers.

Opportunity Identification

In order to boost Sprint’s relationship with its customers, company announced to allow customers to switch service plan even without signing a new 2 year contract agreement. The company is also proposing to start this year charging early termination fees pro rata, and to award valued customers a customer loyalty program. With the introduction of the new network called WiMax this would help the company stand out from the competition. Sprint came up with a new service that makes interested customers encourage to use over data services offered from competitors like Verizon Wireless and AT&T. The WiMax has features offerring data speeds faster