William Esrey

Bill Esrey exhibits classic incumbent-minded thinking. He dismisses the competitive carrier phenomenon as a flash in the pan even as he assuages fears about the state of the economy.

“Emerging carriers are part of the dotcom frenzy of the last couple years,” says Esrey, chairman and CEO of Sprint. “The business plans were not really viable to begin with and never should have been there. But they are not a factor in the fundamental wealth of the industry. This is not a real bad situation or any kind of a sea change.”

Even if it isn't, it has affected Sprint financially. The company's stock has steadily declined from $67 per share and now trades in the low 20s. The company's stock performance is well below the Nasdaq Composite Index. But that's not how Esrey judges Sprint's financial health.

“I would say ‘woe is me’ to anybody that managed their company short-term by looking at their stock price,” he says. “We've always taken the long-term view in creating value.”

One component of that value creation effort is Sprint's Integrated On-Demand Network (ION) brand. Because Sprint's data business didn't grow as strongly as expected to offset declining voice revenues, however, Sprint is now opening data centers for hosting facilities and reorganizing its e-solutions business in hopes of jump-starting data revenue.

To rein in costs, Sprint is focusing on a few core business units with long-term goals in mind. In addition, Esrey is shaving marketing expenses, headcount and travel to lower Sprint's capex budget.

“We're not drawing back from our basic growth plan,” Esrey says. “We want to get ahead of the curve and screw down everything that would otherwise move, so if it takes longer or gets worse in a short period of time we're not caught with more drastic actions that could impact our longer-term plans.”

Specifically, Esrey will key in on third generation mobile wireless technology, broadband, data, international IP, hosting and fixed wireless.

Much of Sprint's current personnel efforts came in the wake of its cancelled merger with WorldCom. Employees got nervous during talks and when the deal was terminated, so Esrey sent the top execs on the road to quell employee fears and answer questions.

That move continues to pay off in today's market turmoil and company restructurings, Esrey says.

“We laid out our own road map of what we were going to achieve over the next few years to get buy-in and understanding and conviction that what is set out is not only reasonable or possible, but exciting,” Esrey says.

One of Sprint's main assets is its wireless network. The company plans to capitalize on its 3G lead. Sprint will spend about $1.5 billion in the next 24 to 30 months to have 3G “totally in place nationwide,” Esrey says. The same amount of money will be spent to double the voice capacity. In addition, Sprint is building international capacity, metro networks and reduced access costs — the same assets WorldCom held. And though Esrey won't speculate on potential merger strategies, he doesn't rule out the possibility of an acquisition.

“We're in business to create shareholder value,” he says. “Anytime we're adding capability, if we can buy it either quicker, better or cheaper than building it, it's always a consideration.”

After 16 years in the business, not much seems to faze Esrey. He steadfastly maintains a long-term outlook and isn't impressed with passing fancies. He adapts to changing industry and market conditions, but with discretion and reticence. He's not worried that Sprint will tumble and fall due to market conditions.

“You'll always have change. That's one of the great things about our economy and the free market system,” Esrey says. “There is an awful lot of opportunity out there. It's hard to say this is a sick industry.”