Sprint and iPCS may be headed to court again

[ComicalMoodyDan]

Sprint fee plan riles affiliate carrier
By JASON GERTZEN
The Kansas City Star

Sprint Nextel Corp. could face yet another legal battle as affiliate carrier iPCS Inc. on Thursday said it would fight Sprint actions that executives said threatened their business.

“We will continue to seek legal protection to enforce our rights and prevent Sprint from damaging our financial future,” Timothy Yager, president and chief executive officer, said in a call with investment analysts.

If the company is unable to persuade Sprint not to raise its fees for handling back-office tasks, iPCS is prepared to file an arbitration case soon in Chicago.

Affiliates such as iPCS build their own wireless networks and obtain exclusive rights to sell Sprint-branded service in their territory. The affiliates also often arrange to pay additional fees for Sprint to handle billing, customer support and other services.

Sprint has proposed a rate increase of about 10 percent for these services even though the company should be experiencing cost savings from “improved economies of scale” resulting from the combination of Sprint and Nextel, Yager said.

Sprint spokesman Matt Sullivan said: “We are comfortable in our adherence to the terms of the agreement” with iPCS.

Also, iPCS has brought in appellate court experts as it continues to counter Sprint’s appeal of an Illinois judge’s ruling that iPCS’ exclusivity rights were breached after Sprint’s merger with Nextel. An Illinois Circuit Court judge ruled that Sprint should divest or shut down the Nextel part of its network in the Midwestern region in which iPCS operates.

http://www.kansascity.com/mld/kansas...s/15974116.htm

[larry]

It's funny how Sprint was willing to buy everyone else except IPCS. They must really not have a good relationship with them.

[jrip]

A few years back Sprint "gave" iPCS about $100 million more than it would have cost to buy them. Just to settle billing disputes when iPCS was in bankruptcy. Some in iPCS's management have let it be known that their intentions are to completely ruin the Sprint name before dumping their territories off on Sprint. They want the Sprint name to have such a bad reputation that nothing Sprint can do will be able to overcome it. iPCS's upper management is still very upset with Sprint because they originally thought they could build their network and Sprint would simply pick up the tab. Hence the first bankruptcy, iPCS spent all their money in the wrong places and still had no network to show for it. So they had way too few customers to support their network. The same problem exists today, waaayyy too small of a network to cover the general population. Because of this Sprint Nextel would have to build out an entire network as if there is nothing there to begin with. That is if they bought iPCS, which they do not want to do for more reasons than I can count.

[Fire14]

Guess that's a good enough reason for Sprint to not want to buy them out, and with all the court cost's they will go bankrupt again and Sprint can pick them up for next to nothing.

To me an outsider, it seems iPCS is being a problem for Sprint & they have ruined their name, not Sprints.

[larry]

Originally Posted by Fire14 Guess that's a good enough reason for Sprint to not want to buy them out, and with all the court cost's they will go bankrupt again and Sprint can pick them up for next to nothing. To me an outsider, it seems iPCS is being a problem for Sprint & they have ruined their name, not Sprints.

I agree. IPCS is small potatoes compared to the size of Sprint. I don't think they've done anything to hurt Sprint other than the crummy service that they apparently provide in their markets.

[jrip]

One more thing, if iPCS cannot stop this rate increase it quite possibly may be enough to force them into bankruptcy real soon. Which is the reason for them pondering another lawsuit. This considering iPCS has had only 1 profitable quarter in it's measly 7 year existence. And that was when the judge during the first bankruptcy wiped out almost all of their debt, and the very next quarter was a big loss. Right now iPCS has to borrow money just to keep the lights on, actually it's been that way since 99'. How they have managed to stay in business I don't know, maybe they should quit the cell business and go into selling used cars or vacuums door to door.