Sprint And Nextel Reach Tentative Merger Deal

[Kris Kumar]

<div class='os_post_top_link'><a href='http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=7058934' target='_blank'>http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=7058934</a><br /><br /></div><i>"Sprint Corp. is close to an agreement buy Nextel Communications Inc. for more than $36 billion in a mostly stock deal that would combine the No. 3 and No. 5 U.S. wireless telephone companies, sources familiar with the situation said on Friday. A Sprint-Nextel merger would face some expensive technology hurdles due to the incompatible wireless systems used in their networks, analysts said. Still, the companies still would benefit by gaining more wireless spectrum to transmit calls and a more diverse customer base."</i><br /><br />Looks like the merger talks have been moving at a rapid pace. 8O The following quote from the recent Wall Street Journal article explains why both the companies are eager to merge: <i>"The carrier (Nextel) has two big problem, and a deal with Sprint would help solve them: It needs more radio-wave spectrum, the valuable airwaves that cellular operators use to transmit calls. And it needs to switch it to an entirely new network technology to keep up with competitors offering services like high speed web browsing. For Sprint, which has been struck waging price wars in the middle of the wireless pack, the deal would make it nearly as large as its bigger wireless competitors, lowering its costs as it embarks on a multi billion dollar plan to upgrade its own network."</i> So what are your thoughts on the merger?

[Kris Kumar]

I will begin the thread with my thoughts. :-)

1. For the CDMA market this is good news. With the combined subscriber base of Sprint and Nextel, Verizon will have a force to reckon with. Sprint I believe is a price player, now Verizon may be forced to lower its prices.

2. T-Mobile: I am worried. They don't have plans to upgrade their systems for high speed surfing. They don't have as good coverage as the other three players. Post merger, they will be a distant forth in terms of subscriber count. I am already thinking of switching to Cingular next year once my contract is up. I think T-Mobile will have a tough time. I don't think cutting price further will help.

3. Motorola: Already fighting a loosing battle to stay at the number 2 position in the handset market, will find it even harder. No wonder its stock took some beating on Friday.

4. Oh this merger would be interesting. I know Nextel has been planning to revamp/overhaul its network to CDMA or something other than iDEN. But merger between companies with two different networks will pose a lot of challenges. At least in the coming year and half while the Nextel customers are switched from one network to the other.

5. This consolidation would make the CDMA technology stronger than ever in US. Which means the Smartphone manufacturers must start focusing on handsets for CDMA.

[Jerry Raia]

4. Oh this merger would be interesting. I know Nextel has been planning to revamp/overhaul its network to CDMA or something other than iDEN. But merger between companies with two different networks will pose a lot of challenges. At least in the coming year and half while the Nextel customers are switched from one network to the other.

That alone makes me grateful I am not with either carrier. 8)

[jdmountford]

I am a Verizon Wireless Employee, formerly a Sprint PCS Customer for nearly Five Years and I sold Sprint service for one year. I live in Topeka, KS. Sprint PCS World Headquarters is in Johnson County, KS (about an hour away). They are in the papers constantly. I work only about 35 minutes away From Sprint PCS.

It seems like all Sprint PCS does is cut jobs, try to save money. Sprint PCS is loosing money hands down. Their Customer Service is hands down awful... Read the Consumer Guide Reports. Nextel Is second only to Verizon for Customer Retention. Who thinks they will keep customers signing on with a sinking ship???? Hands.... Anyone...

Sprint wants more of the business market. Sprint also is banking on latching on to that push to talk technology. Thing is, is that technology will have to change for the CDMA network. And BTW if I remember correctly IDEN works on a CDMA backbone even though it is a different technology. Here is what I am thinking It sounds like the two companies are not exchanging money much. They will both have to spend massive money to interopperate. EVDO phones for America are nearly nonexistant. SO we are talking a lot of money going out for these two companies. It will be expensive! What I am hoping is that this will hopefully drive handset innovation for American CDMA. I certainly hope so at least.

By The By, I had a rare opportunity to speak to an individual in the know.... and the Sprint Nextel Merger is not a spur of the moment thing. They have been in talks for a while now.

[ChemNerd]

I think this is a sign of things to come. This however concerns me. I refuse to have anything to do with sprint again after the last time I had them. I'm a T-Mobile customer because I won't use the alternatives and we don't have Cingular/AT&amp;T. This leaves T-Mobile as one of the weakest networks around and they don't seem to be getting any better (I know they're improving their data plan - but no 3G until 2007).

Oh well - as long as I can keep my phone I'm happy.

[Perry Reed]

As a customer of both Sprint and Nextel (I have a Sprint PCS phone for my personal cell phone and a Nextel phone for work), I am happy about this. As you mentioned, Nextel needs to upgrade their technology and I'm pleased that they'll apparently go with CDMA. Since that's the technology I'm using, with Sprint, the more the better! Hopefully this will indeed push more phone manufacturers to make more CDMA phones. I'm tired of the Cingular and T-Mobile people getting all the coolest phones! :)

As well I hope the larger customer base of the combined company will provide Sprint with more capital to more rapidly upgrade their network to EVDO.