Esrey, William

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Esrey, William

(1940-)
Sprint Corp.

Overview

For years, the Sprint Corporation has lagged behind its biggest telephone competitors, MCI and AT&T, but during that time, William Esrey has been steadily working to develop technology, which will outstrip what the other telecommunications companies can offer by the end of the twentieth century.

Personal Life

William Todd Esrey was born in Philadelphia, Pennsylvania on January 17, 1940, the son of Alexander and Dorothy Esrey. He received his B.A. degree from Denison University in Granville, Ohio, and then went on to graduate with a Master's degree in Business Administration from Harvard University in 1964.

Esrey was married to Julie L. Campbell on June 13, 1964, and they have two sons, William Todd and John Campbell. Esrey is a member of the Million Hills Country Club, the River Club, and the Links Club. He is also a member of the Kansas City Country Club, in Kansas City, where Sprint has its headquarters. In his spare time, Esrey enjoys exercising and helicopter-skiing.

In 1997, Esrey sold 62,000 shares or 14 percent of his interest in Sprint so he could purchase a ranch and a home in Vail, Colorado. This came some months after he and several partners bought the $3 million King Creek Ranch in McCoy, Colorado. Esrey is also involved in skiing through his sponsorship of an aerial stunt and mogul skiing competition held in Colorado resorts.

Career Details

Esrey started his career with AT&T shortly after earning his MBA at Harvard and had become president of a small company subsidiary by the time he was 30 years old. Esrey left the communications field shortly after his appointment in order to try his hand on Wall Street, ultimately rising to the post of managing director at Dillon, Read & Company. By the 1980s, Esrey entered the phone business again, this time as executive vice president of United Telecommunications, Inc.

Though the Kansas City based United Telecom was a fledgling business, it was nonetheless profitable. Under Esrey's guidance, the company dropped all its cellular businesses so it could concentrate its energies and resources on building its long distance service. At that time, cellular service was much more expensive than long distance, and despite the rapid growth in the cellular industry, Esrey knew the company would be unable to successfully compete on both fronts. Although United Telecom was several years behind MCI in the long distance competition, it still gained an enormous amount of business, as companies defected from AT&T in search of reduced costs. From 1986 to 1990, the company's long distance revenues went from $1.1 billion to $5.1 billion, a growth rate of approximately $1 billion per year. United Telecommunications, Inc. subsequently bought up the controlling shares of Sprint in 1988 from GTE. In 1992, United Telecommunications officially changed its name to Sprint.

Sprint is credited with building the first fiber-optic long distance network and was the first company to offer an advanced high-speed data service known as "frame relay" on a nationwide basis. In the early 1990s, Sprint's profit shares remained flat, as giant AT&T waged an aggressive, expensive campaign to win back customers it had lost to its competitors in the initial flurry of deregulation. While Sprint was experiencing a lull, MCI increased its share by slightly less than 2 percent. This occurred largely because MCI launched its "Friends and Family" program, which encouraged customers to register friends they frequently call for reduced long distance rates to those people. This prompted both Sprint and AT&T to scramble to develop competing programs. Sprint introduced "MOST," a program aimed at residential customers and advertised by well known company spokeswoman Candice Bergen.

Sprint overlooked the small business market for awhile, earning fewer long distance revenues than those of its rivals. Throughout the early 1990s, however, Esrey was continuing to refine Sprint's infrastructure, scrambling to stay abreast of the most recent technological innovations, so he could ultimately incorporate the ones he chose into the company's operating system.

By 1996, Esrey had begun talking about the future of Sprint as a "galactic telecommunications company." In this arena, Sprint was more advanced than any of its competitors, and Esrey was already anticipating the next step. In a September 16,1996 interview with Communications Week, the CEO outlined his vision for the future and discussed Seamless Sprint, which would enable one company to handle all communications, including voice, data, wireless, local and long distance. In that interview, when asked how Sprint compares with its competitors, Esrey answered, "We are blending together our international and wireless capabilities with our expertise in local telephony in 19 states. We're also blending long distance under what we internally call One Sprint. We'll call it Seamless Sprint, the single face that we will present to the market." These advancements would essentially make Sprint a full service communications provider.

Esrey was also aware of Sprint's Internet capabilities, and commented, ". . . our network carries 40 percent of the domestic Internet and 60 percent of the international Internet backbone traffic. We provide the bulk of America Online's and several Internet access providers' communications services. We carry one trillion bytes of information a month over the Internet. We plan to increase the capacity dramatically over time." When asked how he envisions the market shaking out, Esrey replied, "There are different scenarios you could anticipate for the future. We believe there eventually will be relatively few large, galactic telecommunications companies."

In 1997, buyout frenzy reached a peak in the telecommunications industry, with MCI receiving three takeover bids in October of that year. The first company to approach MCI was British Telecom, whose bid was surpassed by WorldCom Inc., the fourth largest long distance carrier. Finally, GTE offered its proposal. At the same time, Esrey discounted rumors that Sprint would be the next company to be bought out. In February 1998, it was WorldCom Inc., which beat out competitors and purchased MCI for an astounding $42 billion.

Social and Economic Impact

For years, Esrey has insisted that the focus of Sprint was not merger but expansion into local markets, which would pave the way for his ultimate single company plan. At the time of the MCI buyout, Esrey commented that his company had every necessary asset to be a world player in telecommunications. "We have assembled them methodically and carefully over the last six years, and we haven't paid tens of billions of dollars to do so." This makes the company ripe for a potential buyout, something in which Esrey takes little interest.

Chronology: William Esrey

1940: Born.

1964: Received his MBA from Harvard University.

1964: Joined American Telegraph and Telephone Company.

1969: Named executive vice-president, United Telecommunications, Inc.

1985: Chosen as president, United Telecom Communications.

1992: Became chairman, CEO, Sprint Corp.

On June 3, 1998, the Sprint CEO publicly mappedout the company's future plans, which included the creation of a single network to handle voice, video, data, fax, and cellular. This network, Esrey said, will be in place by the end of the century and ultimately will make the 100-year-old telephone industry obsolete. Sprint's continued success is also getting the attention of analysts, who have begun to realize that Sprint is poised to provide a unique and ultimately vital service.