Urge to Merge
This is a partial transcript from "Your World with Neil Cavuto," December 15, 2004, that was edited for clarity.
NEIL CAVUTO, HOST: It's a big deal and the two companies involved in it are big, as well: Wireless giants Nextel (search) and Sprint (search) merging in order to gain more customers.
With all of these mergers going on, will it narrow the industry down to only two or three bigwigs running the show? Earlier I asked Sprint's chairman and Nextel's CEO that very question.
GARY FORSEE, SPRINT CHAIRMAN (FON): Well, I think what we're creating, Neil, is something that is unique. These assets that we have are a spectrum position. The business proposition that Nextel has been so successful at with push to talk, that Sprint has been successful at as we've taken wireless and innovation into the consumer space, bringing that together is, in fact, creating something that is different and unique.
So we believe we have defined what that next generation communication company looks like. And these assets that we're putting together are unique in that fashion, and we think are going to be competitive and produce value for our shareholders, opportunities for employees and great products and services for the customers.
CAVUTO: But sir, did you see the writing on the wall here that many say this is sort of like what the long distance business was 20 years ago, increasingly a commodity business, and that you had to move fast because that's what it is?
FORSEE: You know, I think, you know, we have certainly from a strategic standpoint tried to look around the corner, Neil, and anticipate what are those trends. And I think again how we really came together was a common vision around convergence.
And certainly, the opportunity for business customers to take advantage of those products and consumers is what we think the strategic impetus for this was.
And certainly, we're coming at it from two companies that are performing well. Not companies that are looking to have some anchor to hang onto. This is about how do we create additional value beyond what we could have created by ourselves.
CAVUTO: You know, the reason why I ask that, Tim, and in your case, at Nextel, it's just a curious question. The phones themselves, increasingly for a lot of folks, have become a freebie. And obviously, for a lot of you guys it's the packages you sign up and the duration of those packages.
But are you troubled that it may be just a matter of time before the packages, too, are glorified freebies?
TIMOTHY DONOHUE, NEXTEL CEO (NXTL): No, I don't think so. I think in the case of Nextel, and it's clearly going to be the case when we put these two companies together, that we're going to be producing differentiated products. So we're going to try to stay away from the commodity game.
And if you take a look at Sprint's data side, their I.P. backbone, for example, the new company will take advantage of, and you look at Nextel and its push to talk product, Neil, I think you've got a very compelling product set that's very differentiated and that people will pay good dollars to have.
I also think that you're going to have a great network between these two companies as we put them together. You're going to have a third generation network that's running on CDMA.
And of course, you're going to have the network which has push to talk interconnection and data capability, as well.
So I look at this thing and I say, we stay away from the commodity market by putting out great products and services that are different than others.
CAVUTO: All right. Well, you guys must be smart, because you speak the language. I don't. But I kid you.
Gary, finally, let me ask you, I mean, these deals, and yours is certainly the most eye-popping of the last week, continue a series of mergers and combinations. Are we back to the 1990's, or what's going on?
FORSEE: Neil, for us, this was the right time, obviously, for the two companies coming together. And something that we worked very hard in the last several months to be sure that we had alignment of our cultures, which again have their foundation and innovation and competitiveness and winning in the marketplace around creating products and services.
So, we locked on to a common vision. And, at least in our case, found the opportunity to match up with a great company like Nextel to create an even better company going forward, Sprint Nextel.
So for us, it was something that was the product of a lot of hard work by our teams to get to this point.
Certainly, within the industry and the economy and the framework that's going on, there is a lot of opportunity for companies to perhaps look at how do you put one plus one together and get a better sum of the parts, is how we looked at it.
CAVUTO: All right.
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