Transcript: Sprint and Nextel Hook Up

This is a partial transcript from "Your World with Neil Cavuto," August 16, 2005, that was edited for clarity.

BRENDA BUTTNER, GUEST HOST: Another marriage was consummated on Tuesday. Sprint (search) and Nextel (search) officially ringing in their $35 billion merger at the New York Stock Exchange, making it the nation’s number three wireless provider behind Cingular (search) and Verizon (search). The combined company began trading under the ticker symbol S on Monday, the same ticker once used by Sears Roebuck.

Earlier I spoke with the company’s top executives and I asked, what’s next for the wireless giant?

(BEGIN VIDEOTAPE)

GARY FORSEE, PRES. & CEO, SPRINT NEXTEL: Well, we’re off and running with the new company, we had our employee kickoff yesterday. Today has been a great day on the stock exchange. We rang the bell this morning. We have had a lot of images of our new brand logo, very prevalent around the stock exchange. And for our customers nationwide, this is a great opportunity for to us provide a company in the marketplace that’s going to have a lot more flexibility, a lot of innovation and a lot of great network opportunities to take to the market.

BUTTNER: And Mr. Donahue, one of your first things to do is spun off the local telephone business, is that right?

TIM DONAHUE, EXECUTIVE CHAIRMAN, SPRINT NEXTEL: Well, that’s part of the plan, yes. We’ll be working on that. And we hope to accomplish that sometime at the end of first quarter, second quarter of next year.

BUTTNER: So basically what you guys are doing is creating a wireless giant. Now you are going to be going up against some pretty fierce rivals, Verizon, SBC, worry you?

FORSEE: Well, we’re a creating a company that will be viewed as one of the top three telecom companies in the country. And we are going to be wireless dominant in terms of our revenue mix. It will be about 80 percent wireless. We’ve got an even mix across customers from businesses to government to consumer. So I think from that perspective we’re going to be a very strong competitor, we’re two companies that are coming together, strength on strength, we’re coming off what has been a very important eight months where we have planned for the merger, both companies continue to execute during that period of time. So we’re really coming into this at the right time of the year. The fourth quarter is typically where over 40 percent of the wireless customers are typically added during that period of time, so we really are hitting this at the right time with the right message to the marketplace.

BUTTNER: And in fact, Sprint had an amazing quarter last quarter, congratulations on that. Is it going to be possible to make those kinds of profits? I believe you doubled them with a bigger company?

FORSEE: Well, we’re going to be a close to $80 billion market cap company. We have got 80,000 associates that have been involved in the planning for the merger, are clearly excited about the opportunity we have to go in the marketplace as a new combined company. And we’re going to be focused on what we have been doing very well in the past. Both companies have been focused on innovation. We have been focused on driving revenue per customer and leading the industry with data services associated with that. So the measures are going to be around profitability of customers, they are going to be measures around how we add customers to the network that we’re going to have, but also continue to focus on the bottom line and top line. This story is about growth and we think we have a unique position to deliver that to our investors.

BUTTNER: Well, Mr. Donahue, one area where you won’t have growth is in the number of employees. There is a lot of duplication between the two companies. And you guys have chosen to make everybody interview for every job. Is that right?

DONAHUE: Now, in terms of the management organization and the employee organization, we have now named, I believe, 1,200 to 1,500 managers in the company. We did go through a process in which we wanted to make sure that we picked the best of both companies. I think it’s a very balanced management team, very capable people. And we just can’t wait to get started.

BUTTNER: How many job cuts do you expect, Gary?

FORSEE: Our story, as we both said, has been about growth. And clearly as we start to rationalize overlapping organizations, whether that be retail stores, whether it be administrative functions, we will have positions that will be reduced, but we’re going to be very clear to our employees that they are our most important asset as we move forward into the competitive marketplace.

(END VIDEOTAPE)

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