Dear Bernie,
Congratulations on your promotion into the wireless industry. While I admired your foray into wireless with MCI WorldCom’s acquisition of SkyTel, I admit I was surprised at your company’s coup in picking up Sprint’s PCS licenses.
You obviously are a savvy businessman with a good grasp of the telecom industry, and don’t need any help from me. But still, I can’t resist sharing with you my observations on the wireless world into which you’ve entered.
First and foremost, kudos on finally bringing to fruition MCI’s longstanding desire to get into wireless. The company in 1993 begged and pleaded with the Federal Communications Commission to issue a nationwide license for personal communications services. When the FCC decided to issue permits by market, rather than have one nationwide license, MCI made the decision not to partake in the PCS industry. (Stupid move in my mind.)
But now WorldCom, as your new company will be called, will have two huge wireless divisions within its ranks and solid wireless leaders in both units. SkyTel is the only paging carrier to actually have positive earnings-a huge win in an industry that is not respected by Wall Street and where a company’s stock can drop faster than a bunch of flies at winter’s first frost.
Sprint PCS has more than 4 million customers and has been aggressive in implementing data services. Again, this is no small feat considering Sprint just started building out its network a few years ago and has faced huge pressures from AT&T Wireless’ Digital One-Rate calling plan.
While I’m sure there are bundling and other opportunities to take advantage of with these two teams, I would caution you not to mess with success. The word bankruptcy has become as common as consolidation in this industry, and success today does not guarantee success tomorrow.
In other words, keep Andrew Sukawaty running WorldCom PCS and keep John Stupka and his team running SkyTel. These men are at the tops of their industries, and as more than a few executives have found out, selling wireless is not the same as selling widgets.
As for the price you paid to buy Sprint, don’t worry. When AT&T paid $11.5 billion for McCaw Cellular Communications Inc.’s nationwide network, it seemed like a pretty penny at the time. Today, it’s peanuts.
Maybe by the time Deutsche Telekom finds its soul mate, your purchase will appear small, too.
