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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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    What's VZW to do?

    These are my mobile phone principles. If you don't like them, I have others.

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

    How do you merge two comapnies whose technology is totally not compatible? That would make no sense at all! What are they going to do...con a cell company into making an iDen/CDMA combo phone? I don't understand that at all.

    Ryan


    Originally posted by Shqiptar
    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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    Re: Re: Sprint, Nextel Are in Talks Over a Possible Merger

    Originally posted by ibmman69
    How do you merge two comapnies whose technology is totally not compatible? That would make no sense at all! What are they going to do...con a cell company into making an iDen/CDMA combo phone? I don't understand that at all.

    Ryan
    What is it you don't understand? TELUS in Canada runs an iDEN network and a CDMA network and they are doing very well.

    Also, the same way AT&T & Cingular overlayed GSM over their TDMA network, Nextel will simply have to add CDMA panels to their towers and do an overlay.

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    Sprint needs to upgrade their network either way. They would upgrade it to CDMA at a cost of $2 to $3 billion.

    Doesnt matter, two crappy companies will make one bigger crappy company. They would still be number 3 behind Cingular (1) and VZW (2).

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    Originally posted by drrjv
    What's VZW to do?

    ...pray.

    Just going off of my own personal observations and thoughts, I think we'll see more agressive marketing by Verizon emphasizing quality of service, coverage, the 'Verizon' brand.

    I also wouldn't be surprised to see VZW reintroduce the PTT service. Not trying to start rumors...these are just my own OPINIONS. (end disclaimer)

    It's a precarious situation...I see alot of people going to VZW stores inquiring about PTT service but are turned off by problems that have been heard and lack of hardware. Obviously, the next place to look would be Nextel. At the same time, VZW supposedly made out when WLNP (portability) hit the scene. There was alot of internal communications on how we were attracting so many new customers coming over from.........Sprint.

    So who knows. Hopefully the threat of increased competition will only mean better rates, services, and options for us consumers.

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    Originally posted by DKNYC
    Sprint needs to upgrade their network either way. They would upgrade it to CDMA at a cost of $2 to $3 billion.

    Doesnt matter, two crappy companies will make one bigger crappy company. They would still be number 3 behind Cingular (1) and VZW (2).
    I have to agree here. I don't think that the Sprint/Nextel merger will be as significant as the Cingular/ATT one was.

    It's kind of like making a Geo Metro/ Ford Fiesta hybrid...yeah, that will really make a big impact on the market

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    Ok, basically this is how such a transaction would work as far as the netowrk goes....Nextel is looking to upgrade thier network to a next generation network(3g), and to do that they have been looking at converting thier entire network over to CDMA, in the 1.9Ghz band. If this would be the case that would make Sprint and even Verizon viable companies to merge with. Now as far as the current network Nextel is currently building out a new network using FLASH-OFDM(i think that is what it is called) in the Carolinas, as a trial. If this stays the case then they wouold not continue the talks with Sprint...They would saty as a standalone.

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    This is fascinating news.

    Some quick thougths:

    * Nextel is getting 10 MHz nationally @ 1900 MHz in exchange for the 800 MHz rebanding. That fits very nicely with Sprint, and it's wide 1900 MHz allocations.

    * Nextel would all-but definitely abandon Flarion and Flash-OFDM if this goes through. EV-DO is real today and Sprint is already deploying it. It would be lovely to have 10 MHz more to play with nationally, of course. And it would allow for some future technology to be deployed alongside EV-DO without having to find spectrum.

    * A big three is not so bad for customers, especially with another dozen reasonably-sized players still in the business. This merger -- unlike the Cingular / AT&T one -- doesn't actually change anything for customers. Sprint and Nextel hardly compete at all.

    * Together, the combo would have scale and despite the concerns about integration, really wouldn't have much to worry about. They could migrate people off of the Nextel iDEN technology awfully slowly. There'd be no hurry. Getting an iDEN-like feature set on CDMA, however, would be challenging. So far, it hasn't come close.

    * I'd personally like to see this happen. 3 carriers with ~40 million people apiece and another 40 million floating around sounds really good from here. The one bit of bad news is that its easier to price coordinate among three than more than 3... But I think we lost the real competition once AT&T and Cingular merged.

    * Per-minute rates are coming near a bottom. We may never see them go much lower than here. Of course, with M2M, nights and weekends, rollover, etc., minutes are cheap. The one thing that might ultimately make them cheaper is VOIP over wireless. Pay $80 per month and get unlimited data. Use the data for whatever you wannt. Today, the latency issues and such won't allow this. Handsets built a few years from now, however, will achieve this trivially in all likelihood.

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    I wonder might Verizon try and get thier had in the pot and bid on Nextel? Verizon can afford to pay much more for them then Sprint could. What do yall think?
    The US Department of Justice said today:

    "AT&T could obtain substantially the same network enhancements that it claims will come from the transaction if it simply invested in its own network without eliminating a close competitor..."


    It's The Network, That Never Stops Working For You.

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    Originally posted by Frito
    I wonder might Verizon try and get thier had in the pot and bid on Nextel? Verizon can afford to pay much more for them then Sprint could. What do yall think?

    SBacklin posted an article in the Cingular forum that mentioned how VZ Comm. were in talks today in regards to a possible run at Sprint Corp. after getting word of this.

    This is going to get interesting.

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    I really like the idea that Sprint and Nextel may merge. Although in the past I have wanted Sprint to merge with Verizon. I just hope if Sprint and Nextel merge they keep(Sprint's) Unlimited Text Messaging

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    Originally posted by Frito
    I wonder might Verizon try and get thier had in the pot and bid on Nextel? Verizon can afford to pay much more for them then Sprint could. What do yall think?
    If it happens, one company wont be purchasing the other, they'll be equal in the deal. I guess sort of like when AOL and Time Warner merge together to become AOL Time Warner.
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    Originally posted by stylus
    SBacklin posted an article in the Cingular forum that mentioned how VZ Comm. were in talks today in regards to a possible run at Sprint Corp.
    Would this mean that it might be a bad idea to bite the contract charges right now because I have a year left to switch to Verizon? If Sprint and Verizon have a possiblility of merging...

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    New York Times says Verizon is pondering buying Sprint.
    Wouldn't that be interesting?

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