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The background, future, and ramifications of the Sprint Nextel merger in 2004 are explored. The evolution of the deal from 1994 to January 2007 is summarized in a timeline. Since the summer of 2006, shares have slipped back into the teens because of ongoing network issues and loss of customers. Michael Nelson of Stanford Group Company says they faced much more integration risk than previously predicted. A Sprint Nextel spokeswoman says the merger entailed more than the blending of two companies, and that since August 2005, Sprint Nextel has spun off its wireline phone unit, rolled up regional affiliates, and upgraded the broadband abilities over much of Sprint's historical network. Sprint Nextel has a joint venture with cable operators and is on the way to reaching operating income synergies of $1.7 billion to $1.9 billion described at the merger announcement. In two investor calls in January, the merged company discussed churn, which is an investor concern, and acknowledged that one factor was a pre-merger plan by Nextel to swap wireless licenses with the government, which limited the capacity of the identification network. The number of subscribers using the network was rising fast, however. In advertising, Sprint Nextel has emphasized transmission speeds, while Cingular and Verizon Wireless have focused on network reliability.
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Information Sources, Inc.
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