* Archive page for historical reference only. This page is no longer being actively updated *
Formerly the #4 national wireless service in the US behind Verizon, AT&T and T-Mobile USA, Sprint was acquired by the latter in 2020, and the brand was discontinued in 2021. The business was formed in 2005 from the merger of what were previously two separate but competing companies, Sprint and Nextel. Sprint was in fact one of America's oldest telephone companies, originally founded in 1899, although it didn't adopt the Sprint name until 1970. Following the Nextel merger, its increasingly low-margin local fixed line services in selected states were spun off to shareholders as what is now CenturyLink, but Sprint Nextel kept hold of its long distance wireline division. Despite initial hopes that the 2005 merger would allow the enlarged business to compete more effectively with its main competitors, Sprint Nextel's performance steadily declined over the next couple of years as customers jumped ship to other suppliers. There was finally a glimmer of light at the end of the tunnel in 2011 as the rate of loss slowed, allowing the group to report its first operating profits after years of deficit. The following year, Japanese mobile company Softbank made a surprise bid to acquire control of the business for $22bn. Yet after that brief respite, performance continued to decline again from 2013 onwards, forcing Sprint to seek some other answer to its problems. Merger talks with T-Mobile USA began at around the same time, and continued on and off for the next five years. A deal was finally agreed in 2018 whereby T-Mobile would acquire Sprint for around $26bn in stock, but that arrangement faced a rough ride from a succession of different regulators. It was finally cleared in Feb 2020, saving Sprint from a deeeply uncertain future. By the end of 2019, total wireless subscribers had slipped below 54.2m. For the year ending Mar 2019, revenues were $33.6bn, with net loss of $1.9bn, largely as a result of a $2bn impairment charge. Under the terms of the T-Mobile merger, Deutsche Telekom became the biggest shareholder in the combined entity with 43% of equity. Softbank retained 24%, with the remainder in public ownership. To secure agreement from regulators, Sprint agreed to transfer ownership of the mostly prepaid Boost and Virgin Mobile services to Dish Network.
Capsule checked 11th January 2022
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Historical profile information for Sprint
Adbrands Daily Update 2nd Apr 2020: The merger of T-Mobile USA and Sprint closed yesterday nearly two years after it was agreed, and a decade since the two companies first started negotiations. At the same time, ownership of the Boost mobile service and its 9m customers transferred to Dish Network, along with selected infrastructure assets, and John Legere has stepped down as CEO of T-Mobile USA in favour of his former deputy Mike Sievert. Deutsche Telekom ends up with a 43% stake in the business, while Sprint owner Softbank has 24%. The remaining shares are publicly owned. The Sprint network will continue to operate for the time being under its new owner, but will be gradually phased out.
Adbrands Daily Update 11th Feb 2020: Finally, a green light. Two years after they agreed an outline deal, T-Mobile USA and Sprint got court approval to merge. District Judge Victor Marrero threw out the remaining objections submitted by a group of US states who argued that the merger would be anti-competitive, despite the fact it had already been passed by the Justice Department and the FTC. A few other obstacles remain, but it looks at last as if this combination of the current #3 and #4 US wireless carriers will actually take place.
Adbrands Daily Update 29th Jul 2019: It was a long, long time coming, but US federal regulators finally approved the proposed merger of Sprint and T-Mobile USA. Talks between the two have been ongoing for at least five years. The crucial development this time was a deal to offload certain key assets into satellite TV provider Dish Network. That deal effectively sets up Dish as a new 4th mobile provider to replace the one being eliminated through merger. It will pay $1.4bn to acquire Sprint's Boost and Virgin Mobile prepaid services, with a combined total of around 9m customers, and will have access to the combined T-Mobile/Sprint wireless and retail network for at least seven years, while it builds its own 5G network. It will pay another $3.6bn in 2022 to buy additional spectrum from Sprint. Meanwhile, T-Mobile and Sprint will combine their other resources, creating a network of around 90m customers, closing the gap with AT&T and Verizon. T-Mobile has promised not to raise its prices for three years and to roll-out a national 5G service by 2022. Despite federal approval, though, the separate lawsuit brought by 10 state attorneys-general is still ongoing, so the merger is not yet fully cleared.
Adbrands Daily Update 12th Jun 2019: A group of attorneys general from 10 US states threw a new spanner into the proposed merger of Sprint and T-Mobile USA, filing lawsuits opposing the deal. The suit is being led by New York and California with the stated goal "to stop the merger in its tracks". They argue that the combination of the 3rd and 4th largest mobile suppliers will lead to increases in price plans for consumers. This is "exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent," said NY AG Letitia James.
Adbrands Daily Update 20th May 2019: The chairman of the Federal Communications Commission threw an unexpected lifeline to struggling Sprint by offering his support to its proposed takeover by stronger rival T-Mobile USA. That followed further concessions offered by the two companies, including investment in wireless services for rural communities and in 5G infrastructure. Sprint has also offered to divest its secondary Boost Mobile brand. This doesn't yet amount to full approval by the FCC, but chairman Ajit Pai said he would recommend such a move to his four fellow commissioners. The FCC has always previously opposed any reduction in the number of national wireless carriers from four to three. The merger still faces opposition from the Justice Department whose approval is also required.
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