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Thread: Sprint, Nextel Are in Talks Over a Possible Merger

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    Sprint, Nextel Are in Talks Over a Possible Merger

    By DENNIS K. BERMAN and JESSE DRUCKER
    Staff Reporters of THE WALL STREET JOURNAL
    December 9, 2004 2:50 p.m.

    Sprint Corp. and Nextel Communications Inc. are in the midst of merger discussions, according to people familiar with the matter.

    Discussions are ongoing, these people say. The deal, these people say, is being treated as a merger of equals, since the two companies share similar market capitalizations of more than $30 billion. But the situation remains fluid and a deal is not certain.

    The two sides have worked out social issues between them, say people familiar with the matter.

    Should it come together, the deal would unite Nextel -- the most profitable standalone wireless carrier, which is currently ranked number five nationally -- with Sprint, which operates the nation's number-three carrier.

    Nextel is dominated by high-paying business customers, attracted to its walkie-talkie like "push to talk" service. Sprint has a heavier concentration of consumers among its 23.2 million subscribers. Sprint also operates the nation's third biggest long distance business, as well as a sizeable local telephone operation.

    Write to Dennis K. Berman at [email protected] and Jesse Drucker at [email protected]

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    This has been speculated upon for years now, but it's good to see that they are still talking.

    I looks like Nextel's in a very good position currently, but is also looking to lose a lot of money in the near future since they will have the hardest time upgrading their network. A merger seems to make a lot of sense for them, especially now while their value is still high.

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    Man your going post this in every single forum huh???
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    My next BB is the BB9800.....

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    Originally posted by tDAWG
    Man your going post this in every single forum huh???
    Yeah.....it's big news. I want this to happen....maybe it will put pressure on Verizon Wireless to stop being so expensive!

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    Originally posted by Shqiptar
    Yeah.....it's big news. I want this to happen....maybe it will put pressure on Verizon Wireless to stop being so expensive!
    Point taken.

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    and it would get us qchat, qualcomm's ptt that rivals iden, nextel currently hold exclusive rights to use it.
    My awareness flows through the rivers of existence which pulse with the vibrance of my thoughts.

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    Does anyone else think a combined Sprint/Nextel network would probably have better coverage in many markets than anyone else once they combine their cell sites together? I think that's a possibility.
    Sprint user since 1997

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    This would be great

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    Would the new network use Nextel's 800 MHz spectrum for CDMA, or would it still be all 1900 ?

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    Originally posted by larryt510
    Does anyone else think a combined Sprint/Nextel network would probably have better coverage in many markets than anyone else once they combine their cell sites together? I think that's a possibility.
    I would think so!

    Nextel seems to have the best coverage (close to or better than cingular) in the real country areas!

    So SPCS's METRO coverage with Nextel's boonies coverage would be great!

    To the poster about signal use.

    I think nextel is attempting to get 1900 pcs signal from the FCC, I do not know much about this or if it is the same type or not, but that might mean they would use 1900 like SPCS does

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    Re: Sprint, Nextel Are in Talks Over a Possible Merger

    Originally posted by Shqiptar
    The deal, these people say, is being treated as a merger of equals, since the two companies share similar market capitalizations of more than $30 billion.
    They may appear to be equals from one point of view, but I would think that Nextel would stand to benefit more from the merger.

    Sprint has its technology down pat and just has to follow through. And it is slowly getting its financial picture together (sure it has to improve CS, continue to build out, etc). Nextel, though it has strong financials now, doesn't have any sound technological future. It is looking at a VERY expensive series of transitions, and the sort of transitions that may well cause customers to leave in droves. So Nextel needs Sprint more than Sprint needs Nextel. Sprint should be very careful about latching on this golden egg that has a rotten core. It is going to drain resources big time. So, yeah, it makes alot of sense for Nextel to join up with an outfit that it can then transition its customers over to gradually, instead of transitioning out of IDEN in situ, which will be very costly. It already is starving for bandwidth-- it will need that much more to effect a smooth transition away from IDEN, if it doesn't have a Sprint to catch them on the other end of big jump.
    Last edited by monkeyboy; 12-10-2004 at 12:27 AM.

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    Re: Re: Sprint, Nextel Are in Talks Over a Possible Merger

    Originally posted by monkeyboy
    They may appear to be equals from one point of view, but I would think that Nextel would stand to benefit more from the merger.

    Sprint has its technology down pat and just has to follow through. And it is slowly getting its financial picture together (sure it has to improve CS, continue to build out, etc). Nextel, though it has strong financials now, doesn't have any sound technological future. It is looking at a VERY expensive series of transitions, and the sort of transitions that may well cause customers to leave in droves. So Nextel needs Sprint more than Sprint needs Nextel. Sprint should be very careful about latching on this golden egg that has a rotten core. It is going to drain resources big time. So, yeah, it makes alot of sense for Nextel to join up with an outfit that it can then transition its customers over to gradually, instead of transitioning out of IDEN in situ, which will be very costly. It already is starving for bandwidth-- it will need that much more to effect a smooth transition away from IDEN, if it doesn't have a Sprint to catch them on the other end of big jump.
    I hate to say that you are wrong, but you are. Nextel has more partners providing data solutions for their phones than any other company in the market. Their handsets are quickly reaching the point to where they can rival the coolest phones Sprint has. Nextel's push to talk actually works. Nextel's CS blows Sprints out of the water, and oh yeah Nextel is the only carrier that operates in the black. Therfore Sprint would benefit the most from the merger. Someone needs to teach them how to run their crappy company, and the fastest growing highest profit producing company would be the best for the job.

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    Haha, Nextel is the most profitable standalone wireless carrier. It's probably true simply because Sprint, Cingular, Verizon and T-Mobile are all not standalone. Gotta love stats that mean nothing.

    This merger would be VERY beneficial to Nextel. They wouldn't have to deal with migrating customers and technologies as much. It wouldn't be that beneficial to Sprint. Sure, Sprint would pick up 10MHz of non-PCS 1900 spectrum in every market, but not too much beyond that. The 700/800MHz frequencies that Nextel has are too scattered to be used for CDMA.

    As an aside, this merger wouldn't change coverage for users. Why? Becuase CDMA can't be deployed in Nextel's lower frequency spectrum and all of Nextel's iDEN phones don't support PCS. More, they are two different network technologies. In a BEST CASE senario, the new company would be able to put CDMA transmitters on Nextel's towers and iDEN transmitters on Sprint's towers (which probably is already the case in many areas as most carriers share most of their towers). Most of Nextel's rural coverage (which doesn't come near Cingular or Verizon's rural coverage) is because they run at a lower frequency than Sprint. Since you can't deploy CDMA over scattered spectrum like Nextel's, it means that Sprint customers won't see a benefit to it. Even future wise, if the new company ever wanted to use that spectrum, they would have to get special handsets specifically made for them - like Nextel does now.

    This isn't a merger of equals. Nextel has done well, but it's prospects for the future are terrible. It just got painted into a corner. Cingular and ATT were headed for a corner as well because TDMA was dying, but at least they had standard and contiguous spectrum that could be used to move to GSM and then UMTS - and even then ATT still died. Nextel is MUCH MUCH worse off than ATT - plus, they don't have anything really appealing to sell (other than a customer base).

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    This would be great if they could integrate Nextel's ptt tech with Sprint phones. I have both carriers (Sprint [VM4500] for personal use and Nextel [Motorola i730] for business use) and I like them both. The only thing I don't like about Nextel is their lack of coverage in non-metro areas. I travel a lot and drive through a lot of dead zones for Nextel.

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    Re: Re: Re: Sprint, Nextel Are in Talks Over a Possible Merger

    Originally posted by kajuroe
    I hate to say that you are wrong, but you are. Sprint would benefit the most from the merger...
    Well despite what you say, Goldman Sachs disagrees with you:

    "Nextel would have more to gain than Sprint -- because Nextel would avoid having to build out a new data network and would have instant access to a broader market -- which would likely put Sprint in a better bargaining position, the analysts said. "

    Other than its customer base, Nextel has very little to offer Sprint. Yes Nextel currently has better CS and financials, but it is staring at a mandatory multibillion $$ technology upgrade to save it from IDEN death...

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