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How Sprint And Nextel Messed Up The Merger: The Cultural Divide

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That the Sprint (NYSE: S) Nextel merger was messed up big time is no secret now…WaPo documents some of the cultural differences that led to present condition. Nextel’s entrepreneurial culture didn’t gel with Sprint’s button-down culture, and since Dec 2004 when the merger was announced, Sprint Nextel has taken steps to merge the two cultures, creating committees and hiring consultants. But despite those efforts, the tension between the two factions has only risen, the story says.

“At the heart of the tension was a sense of mistrust on both sides, they said. Some Nextel employees say they feel the aggressive, entrepreneurial style that spurred its early growth has been stamped out by Sprint’s more bureaucratic approach. Some of the Sprint folks say they feel deceived by Nextel’s deteriorating network, the source of the company’s deepest customer losses.”

Update: Portfolio’s latest issue also has a one pager on what went wrong with the merger: Pre-merger, Nextel earned an average of $60 a month for every subscriber. As of the second quarter, Sprint Nextel’s figure was $57.28. AT&T’s and Verizon’s earnings per subscriber—at $50.63 and $51.05, respectively—have been rising, not falling.

Nov 23, 2007 9:38 PM ET

Posted In: Companies, Sprint

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