Poor reception: Post merger Sprint Nextel struggles

Oct 11 2006 - 06:47 AM ET | Sprint Nextel

The Wall Street Journal is running an interesting front page story today about the trouble Sprint Nextel is now facing, mostly because of the recent Nextel merger. Just yesterday former Nextel CEO and current Sprint Nextel chairman Tim Donahue announced his retirement, the second high profile departure from the company in as many months.

The article gives a look into the merger and some of the reasons why it hasn't gone as smoothly as both companies wanted it to:

Problems emerged soon after the deal closed in August 2005. Though Sprint was bigger, Mr. Forsee accepted a "merger of equals," and key personnel and management decisions were made to appease both sides. For example, Nextel executive Barry West became the new chief technology officer, while Sprint executive Kathryn Walker was given the title of chief network officer. Both positions had responsibility for the future of the carrier's network. Such doubling up led to extra bureaucracy that sometimes slowed decision-making, former executives from both companies say.

Post merger customer additions have dropped off significantly while the figures at both Verizon and Cingular have stayed strong during the same time period. Shares of the company have also taken a dive of nearly 30% since the merger.