Sprint, Telecom Join Forces to Compete Better

The No. 3 and No. 4 long-distance telephone services--Sprint and US Telecom--today agreed to form a partnership that will boost their ability to compete with the industry’s leaders, AT&T; and MCI.

Officials of GTE Corp., which owns Sprint, and United Telecommunications, which owns US Telecom, said a new corporation will be formed, US Sprint Communications Co., to manage the long-distance operations.

US Telecom said the new corporation, jointly owned by GTE and United Telecommunications, will have 2.2 million customers, or 4% of the long-distance market.

AT&T; earns 80% of long-distance revenues, while MCI claims 10%.

Sprint has focused on the residential telephone market while US Telecom has sought out business customers.

‘Competition Working’

Commenting on the anticipated announcement, AT&T; spokesman Herb Linnen said, “The announcement reflects exactly what one would expect in any competitive industry--market forces driving companies to align their resources in the most effective manner to meet competition.”

He called the announcement “further proof that competition is working in our industry.”

GTE reported recently that its third-quarter earnings were down 5% from 1984 to 1985 and said that Sprint’s operating losses adversely affected its overall financial picture.

Sprint has faced increased charges for connection to local telephone lines as well as high marketing costs associated with competition for long-distance business and expansion of facilities.

GTE is headquartered in Stamford, Conn. United is based in the Kansas City area.