Independent telco and Sprint Nextel spin-off Embarq confirmed that it will end its wireless resale partnership with its former parent company next year. It is a sad situation, being jilted by one's offspring after they move out on their own--you can no longer tell them to go to their room. With Qwest Communications ending its own resale deal with Sprint recently, Sprint is unfortunately getting a lot of experience with the feeling of not being wanted. Consider its retribution for Sprint claiming Embarq's former CEO Dan Hesse as its own.
Embarq reported has only 112,000 wireless customers; it hoped a Sprint alliance would bring it 1 million. That is a big discrepancy between hope and reality, but you also have to wonder if the hopes may have been unrealistic. In a market full of very competitive national giants (as opposed to being lazy incumbents), can a somewhat smaller telco with less wireless experience really expect to land 1 million customers? And if a telco like Qwest or Embarq truly wants wireless success, is having a wireless resale partnership really enough? It will be interesting to see how much better off Qwest is with new partner Verizon Wireless and how much better a partner Embarq can find.
- read this report at The Wall Street Journal