Emparq Begins Trading as Independent Local Telephone Carrier

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Emparq Begins Trading as Independent Local Telephone Carrier

7:00 am on May 19, 2006 | Category: Business, Telecom Services, Telephone, Corporate

Sprint has finally completed the final stage of its merger with Nextel, namely the spin-off of its local phone division into a separate company called Embarq.

The newly formed carrier is now the fifth largest telephone provider in the United States, after AT&T, Verizon, BellSouth, and Qwest.

This gives Sprint Nextel time to focus on its core wireless business, but leaves Embarq’s newly created board of executives with the difficult task of keeping the business profitable, despite the declining demand for traditional telephone service among U.S. customers.

“Wireline companies are losing customers to wireless every day, as well as cable providers and (VoIP),” said SurTerre Research/Soleil Securities telecom analyst, Todd Rethemeier. “(Embarq) is a little more rural than others but it still does have some urban markets and it does face those competitive pressures.”

Embarq’s new CEO, Dan Hesse, however, is expressing confidence in the company’s ability to stay competitive with newer and more advanced communication offerings.

“We have our eyes open. It’s not like we have a cakewalk out there, believe me,” Hesse commented. “But I am really confident in our ability to succeed.”

One strategy that Embarq will do to keep its customers interested is bundling, or allowing customers to save money by ordering more than one service. The company plans to create a quadruple play bundle by reselling DISH Satellite TV subscriptions and Sprint Nextel cell phones, along with its own telephone and internet offerings.