Sprint And Nextel To Combine In Merger Of Equals

[DandyDon]

Well it looks as if the rumor mill is talking a Sprint Nextel merger. There are several stories on this RUMOR today.

Nextel owns a bunch of MMDS spectrum, and Sprint does as well. I think combined the own just about the whole country so maybe there is some merit to the rumor.

Sprint, Nextel consider merger, says report
By Dan Meyer
Dec 9, 2004

Less than two months after Cingular Wireless L.L.C. garnered governmental approval for its $41 billion acquisition of AT&T Wireless Services Inc., creating the nation's largest wireless operator, a Wall Street Journal article today indicated another big deal could be in the works between No. 3 Sprint Corp. and No. 5 Nextel Communications Inc.
The report cited speculation on Wall Street that a possible deal between the two carriers was becoming increasingly likely, though neither Sprint nor Nextel would comment on the report.

Analysts have speculated about a possible combination between Sprint and Nextel for some time, noting such a deal would create a third "mega-carrier" with more than 38 million subscribers that could compete more effectively against the recently strengthened Cingular and No. 2 Verizon Wireless. Many have also noted that following Cingular's acquisition of AWS, government regulators would likely approve only one additional merger between the country's nationwide operators, which would bring the number of large carriers down from six to four.

Further fueling merger rumors is Nextel's pending decision on its next-generation technology path. Analysts noted that if Nextel decides to install a CDMA-based network using the 1.9 GHz spectrum it's likely to acquire from the Federal Communications Commission as part of a re-banding effort designed to reduce interference in the 800 MHz spectrum band, Nextel could set itself up for a possible deal with either Sprint or Verizon Wireless.

On the other hand, analysts noted that if Nextel decides to implement a non-traditional technology similar to Flarion Technologies' Flash-OFDM system, which Nextel has installed in parts of North Carolina, the carrier could be readying to remain a standalone entity.

Another potential tie-in between Nextel and Sprint is that both companies control significant spectrum holdings in the 2.5 GHz spectrum band, which both carriers have previously said they could use for next-generation services.

Standard & Poor's Equity Research reiterated its "strong buy" on Nextel's shares, noting a combination with Sprint would provide an even stronger leadership position in the wireless business market. Nextel is currently seen as a strong player in the business market led by its Direct Connect walkie-talkie service, while Sprint has recently reorganized its business operations to provide a better focus on lucrative business customers.

http://rcrnews.com/news.cms?newsId=20722

Another here: http://www.businessweek.com/investor...8916_pi010.htm

And more: http://www.forbes.com/markets/bonds/...ketscan02.html

[bobolito]

"Nextel could set itself up for a possible deal with either Sprint or Verizon Wireless."


Verizon what? Please! There's no way Verizon and Nextel are entering any deals. They despise each other! Now, with a Sprint/Nextel deal that might sour relationships between Sprint and Verizon.

Another question is what about T-Mobile? If this happens they will certainly be left in the cold. Poor T-Mo...

[Kenny]

They just talked about this Sprint-Nextel merger rumor on CNBC. They're saying that this rumor looks indeed to be turning into fact. More confirmed info to come tomorrow.

[Steve B]

Interesting, but would the government allow the merger? There was quite a few people upset about Cingular buying out AWE. If there is truth to this rumor then this merger is going to be an uphill battle. That is what I think. As always, I could be wrong.

[jones]

Originally Posted by SBacklin

Interesting, but would the government allow the merger? There was quite a few people upset about Cingular buying out AWE. If there is truth to this rumor then this merger is going to be an uphill battle. That is what I think. As always, I could be wrong.

If they merge they will still be smaller than VZW (38 million)
so it might get approval.

[agentHibby]

If this happens I doubt there will be anything to divest. Verizon could pick another provider to merge.

I do feel sorry for T-Mobile what are they going to do if this happens??? Not any big GSM guys on PCS to get? Even if they got Edge, Suncom, and Iowa Wireless they would still be way behind and is sounds like they are not going to do HSPDA until 2006, they are thinking about getting more airwaves.

[agentHibby]

Ok I got it!!
Nextel and Sprint PCS Merge to make a 40 million customer company

Then Vodafone exits the Cellco Partnership and Alltel combines its network with Verizon Wireless. Alltel gets Vodafone's 45% US Celluar and Western Wireless will get divested markets.

Vodafone, Deutsche Telekom, and NTT DoCoMo form a partnership for a new Wireless company to take over T-mobile. This wireless company will have cheaper rates than the others and better international rates than the other providers in the US. This could save T-mobile from being hammered down and get wireless networks in many more parts of the US.

Will this happen?? agentHibby gives this 5% chance!

[Gamer03]

Originally Posted by agentHibby

Will this happen?? agentHibby gives this 5% chance!

Who knows....but if it did it would be pretty sweet imho.

[Yugopro]

A quick background here.

Is Nextel getting 800 or 1900 for their existing iden spectrum?

If this goes through, will Sprintel have two bands or two modes?

Lets speculate on the technical aspects!

Larry! Larry! Where are you?

[agentHibby]

Nextel is getting the all NEW PCS G Block 1900 MHz (this is a nationwide license)

Nextel will be handing back some of its 800 MHz SMR licenses to complete the deal.

All of Sprints Network is PCS 1900 MHz

For commerical wireless providers Nextel has the most coverage without any cellular licenses, in terms of square mile coverage.

[larry]

Nextel is going to be giving up its 800MHz frequencies because they interfere with emergency channels/radios. They were already going to have to go to the 1900MHz spectrum regardless if an aquisition happens. If they go to CDMA (which is very likely) this merger would make sense. Think of the possibilities of Nextel and Sprint customers being able to use PTT with one another. That would be sweet. And Nextel would end up with much better phones and cheaper rate plans. I'm just hoping if it happens I don't lose my grandfathered sweet deal of a plan. But that's a long way off to start worrying about it now.

[Yugopro]

Too bad they wouldn't pick up any 800.
If the combination would have that second band, they would truly be a force to reckon with. But what the hey, size means power.

I know that push to talk Nextel feature works everywhere now.
What happens if they migrate the works to 1900 ???????

You see my point? What if a worker deep in a construction site can't connect with his walkie talkie? Does Nextel lose the edge?

[Matt]

I think TM will be fine in the long run - there's no pressure on them to get to 30M quickly - being part of TM Int'l they can get good pricing etc. The need spectrum which I will make a new thread.

[larry]

Another thing worth mentioning is that Sprint and Nextel both have very high ARPU's ($69 and $63) and so this combined company would be bringing in a lot of $$$. Nextel also has the most loyal customers in the business so churn would figure to be low.

Think of all the new coverage that would come from a combined deal between the two once they merge their cell sites together. It might even be better than Verizon's and Cingular's in many areas. I know here in LA and Orange County Sprint's network already is very competitive with anyone else and adding Nextel's towers would probably make them the very best here.

[bobolito]

A Sprint/Nextel deal is the only way for Nextel to gracefully exit the market before they shamefully crash into the dead-end of their outdated network. They know they can't compete in the 3G race so they want the easy way out.

It will also benefit Sprint because Sprint wants to cater to the more lucrative business market. This is why Cingular got AWS. So, if Sprint/Nextel happens, watch for big bucks coming to Sprint which will get them out of their financial hiccups. So I guess the deal benefits both companies in good ways.

Sprint can also take the iDEN network and use it only for PTT and leave voice service on CDMA with new special CDMA/iDEN phones. What an easy way to dump ReadyLink and get something that really works for PTT!

The only problem is I don't see Motorola licensing their precious iDEN PTT technology to companies like Samsung, LG, and others that provide phones for Sprint. So any iDEN/CDMA phones will probably be from Motorola only.

[Kenny]

Sprint, Nextel gain on merger reports
Wall St. Journal says companies are in discussions

By Jordan Robertson, CBS MarketWatch.com
Last Update: 8:45 PM ET Dec. 9, 2004

SAN FRANCISCO (CBS.MW) -- Shares of wireless carriers Nextel and Sprint rose Thursday after the Wall Street Journal reported that the companies are discussing a merger.

Sprint (FON: news, chart, profile) rose $1.78, or 7.9 percent, to $24.28. Nextel (NXTL: news, chart, profile) gained $1.84, or 6.6 percent, to $29.81.

In its Heard on the Street column the Journal said merger speculation is "gaining increasing buzz" on Wall Street and among telecom executives. Later in the day, the online Wall Street Journal cited "people familiar with the matter" and said there are merger discussions.

A Sprint spokesman declined to comment. Nextel could not immediately be reached for comment.

Analysts were split on the feasibility of such a merger, considering that the companies have similar market values of more than $30 billion.

Saying that combining the two management teams would be "like trying to mix oil and water," analysts with Goldman Sachs said in a research note that the deal would be tough for one side in particular to negotiate.

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.

"This is our source of skepticism that such a deal can get done in the near term," they wrote.

Calling the potential merger "a constructive step forward for the wireless industry," Smith Barney analysts wrote in a research note that Sprint would benefit from a bigger network, Nextel's business channels, and the potential for creating enough stand-alone wireless capacity to sell or spin off Sprint's local assets.

"In our view, we think a combination between [Nextel] and [Sprint] has merit," the analysts wrote.

[AnthroMatt]

This is merger talk though, not acquisition right? So both brands (Sprint and Nextel) would remain following such a merge, correct?

[Matt]

Originally Posted by AnthroMatt

This is merger talk though, not acquisition right? So both brands (Sprint and Nextel) would remain following such a merge, correct?

Who knows. If there is a merger/acquisition, it would be addressed in the initial press release.

[bobolito]

According to my Financial Management book, there is a merger in every acquisition. So basically, merger or aquisition, it doesn't matter how you call it. It seems logical to me that the final name would be Sprint because they would be the acquirer. I don't see Nextel buying out Sprint Corporation and all its companies.

[Steve B]

Well, it looks like Verizon Wireless may be in the ring to get Sprint. Take a look at this article (link below).


http://www.nytimes.com/2004/12/10/te...rint&position=


Now, this is getting even more interesting. I realize that these are all just preliminary "talks", it could all stop in an instant. Just for the sake of arguement, lets say the talks are going through. First the big thing was Nextel & Sprint, now possibly, it might be Verizon Wireless & Sprint. OoOoOo

[Gman]

No one has discussed the fact that Nextel is considering what technology to replace IDEN with . CDMA is one of the options and a merger with Sprint would facilitate that move. Nextel owns the rights to a CDMA version of PTT developed by Qualcomm. A merger will provide benefit to both partners.

In the NY Times article they say an announcement could be made as early as next week which surprised me...


G.

[agentHibby]

The problem is that I don't think Verizon Wireless and Sprint PCS could merge.
Reason is too much divestment. They would have too much market controll in a bunch of markets and like a few with AT&T/Cingular deal. It might be possible for Verizon to grab some airwaves before Nextel and Sprint PCS merge, but I doubt that.
Bottom line is everything is 100% pure speculation! We don't really know what will happen.

If something does to Sprint PCS wonder what will happen to the affiates?? And if one holds a license will they had it over??

If this happens the deal for Airgate/Anamosa could not be that big of a deal.

And who knows Verizon might buy the whole thing Sprint (FON)

[larry]

I agree I think a Verizon/Sprint merger would have a tough time getting approval from the FCC. It would create too big of a carrier and there would be too much overlap. But then again what do I know.

[AnthroMatt]

Originally Posted by larry

I agree I think a Verizon/Sprint merger would have a tough time getting approval from the FCC. It would create too big of a carrier and there would be too much overlap. But then again what do I know.

With the right lobbyists, anthing can be approved!

[ComicalMoodyDan]

Verizon and Sprint will never happen. That would just create too large of a company and require a lot of divestmens if somehow the FCC did approve it. I'm pretty confident that if Sprint and Verizon tried to merge the FCC would deny it because they would think it would create a monolopy and hurt competition.

I'd have to agree with that too. Verizon already has a large wireless network as well as landlines, and DSL. Sprint also has a wireless network, Landlines, and DSL. A Sprint/Verizon merger would have one company controlling too much.

[WirelessBeachBum]

I'd love to get back to the days of just two carriers in town, wireless is progressing toward the path of being a flat rate service anyway.

Antitrust concerns would keep the competition hot.

[AnthroMatt]

I just don't think a SPCS-VZW merger would make financial sense for VZW. It would seem to be a pretty costly move with minimal returns, relatively speaking. A VZW takeover of a company like Alltel or USCC would seem to be a much more appropriate move, if VZW was even interested in making such a move.

[azcellphonejunkie]

[QUOTE=larry]Another thing worth mentioning is that Sprint and Nextel both have very high ARPU's ($69 and $63) and so this combined company would be bringing in a lot of $$$. QUOTE]
Larry:
In a recent (Nov. 2004) meeting I was in with Nextel, they said the ARPU of Nextel is up to $75 now! Just an FYI, if you have more updated information, then please inform me...

[WirelessBeachBum]

[QUOTE=azcellphonejunkie]

Originally Posted by larry

Another thing worth mentioning is that Sprint and Nextel both have very high ARPU's ($69 and $63) and so this combined company would be bringing in a lot of $$$. QUOTE]
Larry:
In a recent (Nov. 2004) meeting I was in with Nextel, they said the ARPU of Nextel is up to $75 now! Just an FYI, if you have more updated information, then please inform me...

The really high ARPU could be a problem for them once competitors release comprable PTT services...Most Nextel customers I talk to think they pay too much...

I do see Verizon going after USCC at least pieces of it, although, USCC does compete against VZW in some of their markets (Roanoke, VA for one.) And Alltel would also be a good target, and of course Alltel competes against Verizon in many areas.

Either move would give Verizon Western North Carolina Coverage...aka Wilmington, NC where Verizon just put in a huge call center.

[ComicalMoodyDan]

Talk of Sprint and Nextel merging made it on the home page of Yahoo! today.

Nextel, Sprint Talk Merger