PROGRESS REPORT

Little Faith
The day the merger was announced, shares of Sprint fell 4 percent, reflecting investor skepticism. As of late October, Sprint was trading 30 percent below its December 14, 2004, price of $25.10. Meanwhile, shares of AT&T have climbed 60 percent.

Off Base
Since the merger, the two companies' combined subscriber base has grown almost 40 percent, to 54 million. But Sprint Nextel has struggled to add post-pay subscribers—the coveted customers who pay on a monthly basis.

Income Facts
Pre-merger, Nextel earned an average of $60 a month for every subscriber. As of the second quarter, Sprint Nextel's figure was $57.28. AT&T's and Verizon's earnings per subscriber—at $50.63 and $51.05, respectively—have been rising, not falling.

Losers
C.E.O. Gary Forsee and, before him, C.O.O. Len Lauer were both forced out because of merger woes.

Bad Planning
The company stumbled in 2006 when it introduced low-cost pricing plans to entice new customers. The deals were instead pounced on by existing subscribers, who used them to reduce their monthly bills.

Subprime Strategy
Like some mortgage lenders, Sprint several years ago began courting subprime customers—those with little to no credit history. The upshot: Sprint's turnover rate is now 2.3 percent, while other big carriers average about 1.96 percent.

Up and Out
William Conway, Nextel's former chairman, cashed in options worth nearly $9 million after the deal was announced. Conway is a managing director of the Carlyle Group, the Washington-based private equity firm that he helped found in 1987.

Bottom Line
Investor patience with the deal is wearing thin, the Nextel and Sprint networks still aren't fully integrated, and the stock has a "lumpy turnaround trajectory," according to analysts at Goldman Sachs.

Overall Grade
C–