A “sleeper story” in telecom at the moment is what’s about to happen to the local telephone division of Sprint, which is being spun-out after the Sprint-Nextel merger.
This could have a much bigger effect on the US telecoms landscape than is currently anticipated.
The Sprint local telephony division is a cash-cow, but only has a footprint of about 5% of the US market. It is concentrated heavily in the Florida and Las Vegas markets (i.e. growth regions). Whilst heavily unionised, it is run with a pretty high degree of efficiency. There are none of the wild antics of the cellular division, or stranded assets of the long distance group. Networks upgrades to packetized voice are mostly done and dusted.
Richard notes how the Baby Bells are being sued for allegedly colluding not to compete out-of-territory.
I think the Sprint deal could change that. If it doesn’t get snapped up by a big daddy, the (by then renamed) Sprint local outfit will be a real nuisance. It’ll have a much stonger balance sheet than most LECs. It’ll have a culture of being part of a nationwide telco. If anyone goes for out-of-territory VoIP deployment and busts the cartel, they’re the ones to do it. Sadly the nationwide MMDS spectrum ended up with the main wireless group. If it’d been handed to the fixed subscriber access group at Local, it’d have made more sense to me — since it’s destiny is probably in providing fixed wireless broadband.
This is all rather ironic to this former Sprint employee. For years the mantra was “One Sprint”, and how Sprint would only prosper if the local, long distance and PCS bits pulled together. But a few nice meals and corporate jet trips over to Virginia and suddenly you’ve discovered a long-lost brother and disowned your first-born. Such is business! Oh, and there’s the small matter of what to do with the empty half of your newly-built $700m campus once the Local folks evacuate…
(Some Sprint insider stuff: The plush campus has been called “Johnson County Correctional Center” by one wag. The prisonesque architecture, looming sniper-toting watchtower and highly conservative institutional attitudes do somehow match the moniker. Somehow the architects also decided that compulsory exercise in sweltering 40C summers and exposure to bone-chilling midwestern blizzards was to be a major attraction when traversing the vast site. Luckily you can always retire for a congenial team meeting over in Conference Room J across the road if it all gets to be too much.)
Posted by Martin Geddes at 12:37 AMTrackBack URL for this entry:
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My prediction is on a merger between Sprint local and Alltel local once Alltel seperates its' Wireless Unit from its' local unit?
Only ego's, could prevent this...
Posted by: at October 4, 2005 09:16 AMIntriguing idea. Too bad Cincinnati Bell spent all the cash they had laying about on chasing nationwide fiber.
Posted by: at October 4, 2005 01:44 PM