In a string of tirades against Sprint Nextel's cellphone service, posted recently on Bloggingstocks.com, Steve of Indiana chimed in.
"I was a Nextel customer for 2 years," he began, adding that he switched to Verizon in August because of poor customer service, dropped calls and sketchy signal availability. "I'll never go back to Nextel," wrote Steve, who confirmed his comments in a telephone interview but spoke on condition of anonymity. "I thought when they merged with Sprint last year that things would get better," he wrote, "but they didn't -- and bingo, my contract ended so I was outta there."
For the mobile carrier, which is based in Reston, there have been too many Steves since the 2005 merger. Analysts, employees and stockholders are wondering when and how the company might turn things around and compete more aggressively with rivals such as Verizon Wireless, AT&T (formerly Cingular) and T-Mobile, which are adding customers in droves.
Next Wednesday's update on fourth-quarter earnings almost surely will not cheer them, as Sprint officials made clear in a Jan. 8 announcement intended to dampen Wall Street expectations. They said the company, which lost 300,000 monthly subscribers in the fourth quarter, would lay off 5,000 workers in the coming months and miss its 2007 projections.
It was the latest in a string of bad news. In the second quarter of 2006, Sprint's profit fell 38 percent, and the company lost customers at double the rate of Verizon Wireless. The following quarter, Sprint lost 2.4 percent of its customer base each month -- again, a rate notably higher than that of its competitors. It has also faced turmoil among its management in the past seven months, ousting not only its chief operating officer but also its chairman and longtime Nextel leader, Timothy Donahue.
Sara Krueger, a spokeswoman for the company, said it is making strategic investments to improve its network, customer satisfaction and "brand awareness and marketing," among other things. "We are already seeing growth in certain segments of our wireless and wireline businesses, and are confident these investments will . . . return the company to an overall growth trajectory in 2008," she said in a written response to questions.
Everyone knew the chief challenges the two companies faced when they combined in what they termed a "merger of equals." Nextel -- the wireless company based in Northern Virginia and best known for its cellphones equipped with a walkie-talkie-like feature -- would have to resolve both its cultural and technological differences with Kansas-based Sprint, which had a reputation as a traditional telephone company that operated in a cautious, deliberate manner -- one that struck many Nextel employees as unduly bureaucratic.
Moreover, the companies operate two different technologies, which has complicated efforts to combine resources. The merger's technological challenges have proven substantial because Nextel operated on a spectrum range similar to that used by taxi dispatchers. Its "push to talk" feature was popular with construction foremen and others needing to communicate often and wirelessly with several people at the touch of one walkie-talkie-type button. Sprint's wireless network operated on a different system, called CDMA, also used by Verizon.
The long-term plan is to shift Nextel customers to Sprint's network, but in the interim, customers must choose between two sets of services and devices unless they select one of the recently offered "dual-mode" phones that operate on both systems.
The dual-mode phones are a temporary fix, and the Nextel customer base "won't be migrated anytime soon" to the revamped Sprint operation -- which will include the walkie-talkie feature -- said Jonathan Atkin, an analyst for RBC Capital Markets.
Moreover, Atkin said, Sprint officials had expected more growth for the Nextel brand, when in fact it had largely saturated the hospitals, law offices, construction sites and other workplaces where it is most popular. "The merger kind of masked that," Atkin said.
The companies' two-prong technology and cultural challenge was obvious at the merger's onset, but its solution was not, several analysts said, and Sprint Nextel is still trying to find its way.
"The integration of the two companies and the two technologies has been much more difficult than originally thought," said Michael Nelson, a telecom analyst for Stanford Financial Group. "Aside from the obvious technological differences, I think they've really stumbled operationally."
The biggest problem, Nelson said, is marketing, not technology. While Cingular and AT&T Wireless aggressively pushed their "raising the bar" campaign following their 2004 merger, and Verizon cleverly touts its reputation for good service, he said, their rival from Reston settled on the lackluster motto: "Sprint, together with Nextel."
"That doesn't tell the consumer anything," Nelson said. "They had an opportunity to create a new, hip, innovative marketing message. And they really dropped the ball."
Sprint's Krueger said the company is determined to improve in that area and others. "We are addressing the customer experience comprehensively," she said, "from initial marketing through the sales process, service and repair, billing and customer service."
The cultural clash, meanwhile, continues to be an issue at the company, which retains major facilities in Kansas and Reston. Not only did Sprint executives run their pre-merger company in a more traditional, buttoned-down way than did their Nextel counterparts, but the two firms also acknowledged that they had significantly different structures for billing, sales, legal work and other operations.
Krueger said such differences are being ironed out. "We did more than simply add the two legacy corporate cultures together," she said. "We have restructured the entire company to support our vision."
One former Sprint Nextel official, who spoke on condition of anonymity because he works for a competitor, said there is hope for his previous employer.
"Time is the great healer," he said. "They are making progress. The question is whether Wall Street is patient enough to realize it."