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December 15, 2004

Sprint, Nextel to Merge

By Glenn Fleishman

Sprint and Nextel announced their $40 billion merger of equals: Sprint’s CDMA technology has been a block to offer push-to-talk (PTT) services that Nextel has made great profits on. Nextel has no migration plan for next-generation data services, although they’ve been testing approaches that aren’t integrated with their iDEN voice technology. Sprint has already committed to spending billions on 3G high-speed voice and data systems.

In seemingly unrelated news a few days ago, Cingular dropped its challenge to the FCC proposal that would allow Nextel to reorganize its scattered chunks of frequency, giving them new contiguous spectrum in exchange for paying for the cost of moving the public-safety incumbents to Nextel-vacated frequencies. It’s a multi-billion-dollar deal that the FCC offered, and Verizon Wireless and Cingular Wireless now no longer oppose it, and one would expect Sprint and Nextel to accept the deal, although Nextel wants to pay substantially less.

The new Sprint Nextel is at a rough parity with the subscriber base of Cingular-post-AT&T Wireless acquisition and Verizon Wireless (all on their lonesome). Sprint Nextel will have 35 million subscribers, Cingular 47 million, and Verizon Wireless 42 million. T-Mobile becomes a distant fourth (about 16 million subscribers) with no data upgrade plan in sight. This didn’t elude the Wall Street Journal, which filed this report in which T-Mobile notes that worldwide they have about 70 million cell phone users which allows them to compete on scale for handsets and network components.

Posted by Glennf at December 15, 2004 10:36 AM

Categories: Cellular, Financial

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