Sprint Corporation

• Date founded: 1899
• Industry: Telecommunications
• Corporate headquarters: Overland Park, Kansas
• Type: Public

Overview

Sprint Corporation was a publicly traded American telecommunications company providing wireless and wire-based, or wireline, telecommunications services and products nationally and internationally. It was the holding company for Sprint FON (fiber optic network) and Sprint PCS (personal communications services), and offered services under the brands Sprint, Boost Mobile, Virgin Mobile, and Assurance Wireless. It merged with rival T-Mobile in 2020, and the Sprint brand was phased out.

History

Sprint Corporation can trace its beginnings to Brown Telephone Company and the Southern Pacific Railroad. Brown Telephone Company was formed in 1899. Cleyson Brown, also known as C. L. Brown, founded the first local utility company in Abilene, Kansas, and then proposed an idea for a telephone company. At the time, only one local telephone company existed in the area, and Brown wanted to develop another to compete with Bell Telephone.

In 1903, Brown's company collaborated with several other Kansas independent telephone and telegraph companies to establish the Union Telephone and Telegraph Company, which provided long-distance service to Kansas City. By 1911, Brown Telephone was the second-largest telephone company in Kansas and changed its name to United Telephone Company.

Brown continued to grow his company, and in 1925, he formed United Telephone and Electric (UT&E). The company bought stock in other companies across the United States and, within a few years, had holdings in nearly seventy companies. However, by the Great Depression of the 1930s, many people could not afford to keep their phone services. The Great Depression caused financial issues for UT&E, which reorganized. Brown died in 1935. Under the reorganization plan, UT&E became United Utilities Incorporated in 1938. After some years of unsteady growth, the company eventually acquired several telephone companies in the following decades.

In 1972, United Utilities became United Telecommunications or United Telecom. In the 1980s, United Telecom launched wide area network (WAN) communication services and entered the long-distance voice market. It purchased the telephone company ISACOMM in 1981. Two years later, it began offering cellular telephone services through the company United Telespectrum. United Telecom then purchased U.S. Telephone Communications in 1984.

Southern Pacific Railroad began installing telegraph wire along its rail lines in the 1940s, which the company used for internal communications. In the years that followed, it laid fiber optic cable along its lines. Through its Southern Pacific Communications Company (SPCC), it began selling private long-distance telephone service in 1972. It also offered fax services called SpeedFAX but could not provide public long-distance services. At the time, AT&T had a monopoly on public telephone services. The Federal Communications Commission (FCC) allowed SPCC to offer switched voice services, a type of public long-distance service, in 1978. The company wanted to differentiate the new services from its SpeedFAX, so it created a contest to create a new name. The name chosen was Southern Pacific Railroad Internal Networking Telephony or SPRINT.

SPCC merged with the telephone company GTE (General Telephone & Electronics Corporation) in 1982 and became GTE Sprint Communications in 1983. GTE Sprint continued to lay fiber optic cable along its calling routes, a practice that was originally begun by SPCC years earlier. This caught the attention of United Telecom, which worked out a merger deal with GTE Sprint to form US Sprint in 1986. A memorable advertising campaign featuring a pin dropped in front of a telephone receiver followed and helped increase US Sprint's customer base.

In the following years, the company competed with AT&T and MCI, and they all raced to introduce more efficient networks. US Sprint continued to focus on fiber optic cable lines, while AT&T and MCI used microwave networks. By 1988, US Sprint completely relied on fiber optic cable. The same year, the US government began a contract with both US Sprint and AT&T. However, by this time, GTE began to experience financial problems and could not afford to keep its holdings in US Sprint. United Telecom purchased GTE's holdings in US Sprint in 1989.

In 1990, Sprint ventured into the international communications market and made deals with other large companies. Two years later, United Telecom officially acquired US Sprint, which became Sprint Communications. United Telecom then adopted the name Sprint Corporation. Sprint Corporation acquired Centel in late 1992, and by the following year, Sprint was the third-largest long-distance service provider in the United States, behind AT&T and MCI.

In the late 1990s, Sprint began offering high-speed digital and internet connections known as Integrated On-Demand Network (ION). By the end of the decade, the company offered bundles of local calls, long-distance calls, and internet services. It also focused on wireless communications but remained fourth behind other larger wireless communications providers, including Verizon, Cingular Wireless, and AT&T.

Sprint entered into a merger agreement with WorldCom Inc., which owned MCI, in 2000. Since the merger would create an enormous monopoly, the FCC in the United States and regulators in Europe denied plans for the takeover. Sprint and Nextel Communications then merged to form Sprint Nextel Corporation in 2005. Over the next few years, the two companies worked on integrating despite having differing network technologies. The two both sold off some of their companies and holdings, but the company continued to suffer an identity crisis in the years that followed.

The Japanese telecommunications company SoftBank purchased Sprint Nextel Corporation in 2013 and changed its name back to Sprint Corporation. Into the late 2010s, Sprint remained a viable player in both wireless and wire-based telecommunications. It continued to sit as the fourth-largest mobile network provider in the US market.

In 2017, Sprint and rival T-Mobile first considered a merger. After initial talks fell apart, an agreement was finally announced in April 2018. A lengthy approval process followed before the merger was completed in April 2020. The new company determined that the T-Mobile brand would be retained while Sprint would be phased out; the Sprint name was officially discontinued in August 2020.

Impact

Throughout its history, Sprint Corporation grew from a pioneering long-distance telephone provider to include a range of other telecommunications services, reaching millions of people. In the late twentieth and early twenty-first centuries, it was a major player in both wire-based and wireless communications, though smaller than rivals such as Verizon and AT&T. Sprint's merger with T-Mobile was a major development in the telecommunications industry, putting the combined company behind only Verizon as the second largest wireless carrier in the US. The deal drew significant criticism from many consumer and antitrust advocates, who suggested it further limited competition.

Bibliography

Blumenthal, Eli. "T-Mobile Leapfrogs AT&T, Saying It's 2nd Largest US Carrier after Sprint Merger." CNet, 6 Aug. 2020, www.cnet.com/news/t-mobile-leapfrogs-at-t-claims-status-as-second-largest-us-provider-following-sprint-merger. Accessed 20 Oct. 2024.

Conrad, Roger. "T-Mobile US: The Sprint Merger So Far." Forbes, 23 June 2020, www.forbes.com/sites/greatspeculations/2020/06/23/t-mobile-us-the-sprint-merger-so-far/?sh=3240a982271b. Accessed 20 Oct. 2024.

Gara, Antoine. "A Win for Your Pocketbook: Telecom Giants Sprint and T-Mobile End Merger Talks." Forbes, 6 Nov. 2017, www.forbes.com/sites/antoinegara/2017/11/06/a-win-for-your-pocketbook-telecom-giants-sprint-and-t-mobile-end-merger-talks/#51b98aed547c. Accessed 20 Oct. 2024.

"Sprint Born from Railroad, Telephone Businesses." NPR, 15 Oct. 2012, www.npr.org/2012/10/15/162963607/sprint-born-from-railroad-telephone-businesses. Accessed 20 Oct. 2024.

"Sprint Corporation History." FundingUniverse, www.fundinguniverse.com/company-histories/sprint-corporation-history. Accessed 20 Oct. 2024.

"United Telecommunications, Inc. History." FundingUniverse, www.fundinguniverse.com/company-histories/united-telecommunications-inc-history. Accessed 20 Oct. 2024.