A Remarkable Family TreeA term I found endearing from an NPR transcript described the history of sprint as a “remarkable family tree” 1. Before Sprint was what they are today, they were a company founded in Kansas in 1899 named Brown Telephone and they were a railroad, the SPR or the Southern Pacific Railroad. It was in 1972 when the president of the SPR wanted to find a way to use the existing communications lines for long-distance dialing.
The Southern Pacific RailroadRailroads were known to install telegraph wires on poles along its tracks to communicate with dispatchers and engineers. By the 1940’s these systems had taken on voice communications and had grown large long distance networks. These networks were independent from other systems at the time and so they operated the system as an independent company, the SPCC or Southern Pacific Communications Corporation. Brown Telephone CompanyIn the first branches of Sprints family tree there is the Kansas based Brown Telephone Company. Brown Telephone Company was in control of a market in the midwest being one of the better alternatives to Ma Bell. Over the years the name of Brown Telephone Company shifted to United Utilities in the 1940’s and to United Telecommunications in 1972. Following the breakup of AT&T in 1984 they began to expand towards becoming a long-distance company named US Telecom and just two years later GTE Sprint, from the Southern Pacific Railroad side of the family tree, merged with United Telecom.
GTE Corporation GTE Corporation came into the picture in 1983 when they offered to buy SPCC which would also include a satellite company & Sprint. Being the parent company of General Telephone they hoped to add this system to use as their main defense against their competitor AT&T because Sprint included hundreds of miles of property between major cities. They (GTE) were also the United States’ largest telecommunications company apart from Bell companies. GTE received SPCC in late 1983, renaming it GTE Sprint Communications.The Merger, The Diamond & The PinGTE Sprint and United Telecom merged to form US Sprint in 1986 deciding on a 50-50 limited partnership. Following this, the company released its diamond shaped logo split by lines representing fiber optic channels.
Another symbol represented the brand, a tiny pin which you might see in some of the first advertisements from Sprint has a history in itself. The pin was first featured in their first AD where it was dropped onto a table in front of the receiver of phone where the “ting” from the drop could be heard thousands of miles away. This AD was so powerful that it was the cause of a 50% growth in customers within 9 months. Unfortunately they were not ready for this kind of success, customers complained about inaccurate bills and trouble using US Sprint. 100% Fiber OpticAfter receiving over $2 billion from United Telecom and GTE, US Sprint gave aways instructions to help callers access US Sprint from any phone and also built a National Operations Control Center. This Control Center made US Sprint the only non-AT long distance operator service. US Sprint was gaining speed in this race and when they began offering their own 800 services they were about to take the lead against AT. The next move for US Sprint was to blow up one of their last microwave towers in the Winter of 1988 and by May 1988 US Sprint had gone completely fiber optic.
These moves inspired AT and MCI to convert their systems to fiber optic cable but due to their complicated networks they could not complete the task as quickly as US Sprint was able to.New Opportunities The early nineties gave way to some great opportunities for US Sprint. Due to completed construction of its third transcontinental route they won a contract that allowed them to handle 40% of the governments long-distance business. This made the government US Sprints largest customer. US Sprint won access to millions of Bell company phones in 1989. In the past these phones could only gain long-distance service through AT but now US Sprint could gain thousands of new accounts through long-distance calls from Bell company pay phones. Unfortunately GTE was not having the same luck.
In 1989 United Telecom purchased 30.1 % interest in US Sprint from GTE and would provide them with the remaining 29.9 % when they came up with the funds. GlobalizationThe globalization of US Sprint started in August of 1989 when US Sprint acquired Long Distance/USA.
The Honolulu based company handled calls between Hawaii & Japan. A relationship blossomed with Britain after US Sprint bought 50% interest in a transatlantic fiber optic cable system that ran with Britains Cable & Wireless. The relationship grew to allow US Sprint to have joint marketing in Britain with Cable & Wireless. US Sprint consisted of mainly the business market providing video-conferencing centers, and being the first carrier to have public frame relay data service. This service allowed more information to be transmitted in less time.
Next came the worldwide virtual private network services which enabled a customer to communicate to offices on opposite sides of the globe with ease. US Sprint continued to grow globally after being licensed to construct a fiber optic network in the UK followed by arrangements with Canada, the Mexican Telephone Authority (TelMex) and the Russian Telephone Network.New Name New Growth1992 came and United Telecom completed the US Sprint buyout from GTE. United Telecoms Bill Esrey came up with the idea to rename both US Sprint and United Telecom in an effort to make the usage of promotional budgets more efficient. The result was US Sprint becoming Sprint Communications while United Telecom became the Sprint Corporation. By 1993 Centel operations had become a part of Sprint. With operations in 13 states, acquiring Centel led the company grew to be the third largest long distance provider in the U.
S. behind AT and MCI. In the time between 1993 and 1997 Sprint’s numbers had grown from 6 to 7 million local service customers. ION (Integrated On-Demand Network)During the late 1990’s, major services such as AT and MCI began releasing AD campaigns bashing their competition and informing viewers of their superior service while Sprint kept their advertisements non-confrontational.
While these ADs were coming out Sprint was looking for ways to set themselves apart from the competition. In 1998 ION was born. ION was part of the new generation of telecommunications that Sprint began advertising. This new generation hoped to give consumers high-speed digital connections that allowed simultaneous transmissions of video,voice and data and also providing Internet connections which were called Integrated On-Demand Network, hence the name ION. This was first marketed towards businesses and then to residential consumers in 1999. The ION service would bundle internet services, local and long distance calling onto a single bill.WorldCom MergerComing in fourth place behind Verizon, Cingular & AT was Sprint’s wireless division with just over 8 million customers. Although 8 million may seem like a lot of people to provide a lot of revenue, the wireless division made no money.
Due to Sprint not being a leader in any of its services, WorldCom was ready to make an offer Sprint couldn’t refuse. WorldCom was the new parent company of MCI and in October 1999 they offered Sprint $115 billion. Although Sprint’s stockholders were on board with the merger, federal regulators in July of 2000 ruled that it should not go through. This fallthrough had set back Sprint’s plans for international expansion. But the silver lining came with the knowledge that they were unique amongst their competitors. Sprint had four main business areas: local phone, long-distance, internet and wireless. Unfortunately the telecommunications market was sinking in 2001 causing Sprint to layoff over 6,000 employees. The industry as a whole had laid off/fired 225,000 workers that same year.
But even in the hard times Sprint continued investing in new technology eventually contracting with Nortel Networks Corporation to release the packet network. The packet network was a new switching technology that allowed more traffic on telecommunications lines. They were gaining new customers for their Wireless Web service as they were planning new products and services. Sprint seemed ready for a stagnant market and falling revenues during the early 2000’s.