Sprint Nextel Corporation: Telecom Industry Profile

Introduction to Sprint Nextel and the Telecom Industry

The telecommunications industry is among the most highly flourishing and competitive industries in today's global marketplace. The rise of wireless internet usage and the proliferation of mobile communication devices have both contributed to a booming marketplace that continues to experience relative growth even in the face of a struggling economy. That said, the recession has had an impact that many leading telecommunications firms have felt palpably. Such is the case with Sprint Nextel Corporation, a leader in the industry that has nonetheless been affected by the sagging economy.

Like many of its counterparts, Sprint has experienced both the highs and lows of an unstable economy. The company would ascend to its current form in 2005 when the Sprint wireless carrier purchased Nextel Communications, elevating it to its status as the third-largest wireless carrier in the United States, behind Verizon Wireless and AT&T Wireless.

The Nextel Acquisition and Business Expansion

According to BusinessWeek (2005), which reported on the aftermath of the acquisition, "Sprint's sales soared 42%, to $39.3 billion in 2005, more than any other telecom services provider that year. How? Sprint decided in 2004 that continuing to chase growth as a long-distance carrier was a slow-go strategy. Instead, it bought wireless player Nextel and added more than $13 billion in revenues" (BusinessWeek, p. 1). This represented a shift in focus away from the dwindling landline business toward a far greater emphasis on expanding its wireless network.

This strategic shift would also coincide with the proliferation of Clearwire, Sprint's wireless internet network, and its partnership with cable providers such as Comcast and Time Warner (BusinessWeek, p. 1). These partnerships would make Sprint a leader in the business category broadly referred to as telecommunications — a field that encompasses products such as the wireless cellular phone, the smartphone, the tablet, the cable router, and a host of other instruments used to facilitate and expedite mobile communications, data retrieval, and multimedia interaction.

Services, Market Reach, and Corporate Structure

In addition to its hardware ecosystem, and most importantly, Sprint Nextel operates as a service company. The overarching description of the services it provides helps to characterize the industry's key offerings. According to the New York Times (2011), "the Company operates in two business segments: Wireless and Wireline. Sprint offers wireless and wireline voice and data transmission services to subscribers in all 50 states, Puerto Rico and the United States' Virgin Islands. The Company's retail brands include Sprint, Nextel, Boost Mobile, Virgin Mobile, Assurance Wireless and Common Cents SM" (The New York Times, p. 1).

As the third-largest provider of wireless services in the United States, Sprint reported to its investors that as of the end of fiscal year 2009, it served approximately 49 million users (CrunchBase, p. 1). According to the New York Times, service to these users is most typically provided through subsidiaries, with Sprint functioning as a holding company for its various brands. Sprint's central headquarters are based in Kansas, but the company allows its subsidiaries to operate according to preexisting labor divisions, marketing strategies, organizational structures, and local headquarters. As of 2005, Sprint had roughly 60,000 employees working across the country (BusinessWeek, p. 1).