Now that the WorldCom Inc. deal to buy Sprint Corp. is dead, Sprint is busily looking to re-strengthen relationships with employees, customers and Wall Street analysts. Other potential suitors are fewer now that Deutsche Telekom AG announced its intentions to buy VoiceStream Wireless Corp., eliminating DT’s want of Sprint’s wireless business. Sprint Business President Len Lauer recently discussed the repercussions of a deal gone wrong and where the carrier might go from here.
NWC: Sprint, along with WorldCom, has spent the past nine months working toward a merger. How does Sprint view those nine months now that the deal fell through? Was it time wasted?
Lauer: No doubt we invested time and money into a deal and didn’t get the results we wanted. It’s very disappointing. The merger did consume the time of our senior management team. The short-term reaction from a vast majority of the employees is relief. There was uncertainty regarding job security and how the culture would change within Sprint.
NWC: How is the morale of employees who expected this merger to go through, and who may have expected retention bonuses which is standard practice these days?
Lauer: Some people get paid if the merger goes through or not. The main message I carry to employees is we are not here for the short term, for the six-month bonus, or to see the stock price go up and down. We’re here for long term growth.
NWC: Industry watchers say other service providers are lining up to make bids on Sprint. Will Sprint entertain new offers?
Lauer: Like any publicly traded company, you have to represent shareholders’ interests and listen to offers. If an offer were to come in, it would need to provide long-term value for shareholders that on our own, we would not be able to provide. We don’t see that with any other provider. Our strategy is to invest in high-growth areas where we have strengths and where we could be stronger.
NWC: What areas are you referring to?
Lauer: Wireless first. Sprint PCS has been a great success. We have to start leveraging the wireless Web and make a strong investment in our wireless portal strategy to be a true leader. We are also launching our wireless broadband services using [multichannel multipoint distribution service (MMDS)]. That is taking quite a bit of capital investment. On the global side, we are in a resale agreement with Global One and WorldCom. But, we need ownership of our own facilities overseas. Sprint is looking at its options internationally. Other areas include high-speed data. We have converged network products with [Integrated On-demand Network]. Sprint is looking at DSL offerings from the IP side of the house where we have tremendous demand for IP and packet data services.
NWC: Is Sprint considering additional partnering options with WorldCom?
Lauer: We have three reseller arrangements in place for WorldCom’s international services, WorldCom’s local metropolitan area networks and they are reselling our PCS services. We anticipate keeping those. MMDS might be another possibility, but I couldn’t comment further on that.
NWC: What do you consider to be some of the most misleading concepts about Sprint right now?
Lauer: Don’t buy into what you read in the daily press and what analysts say. The natural reaction was that Sprint would be bought within three weeks of the deal with WorldCom ending. It’s a sobering idea that maybe Sprint will be on its own. There will probably be a period of another month or two of uncertainty from the outside, but once we bring our story out that will change. Sprint is a viable company with good assets and will do well on its own. We now need to prove it with good customer service and financial performance.