Sprint Nextel Corporation

From Open Encyclopedia

**Sprint Nextel Corporation**
Image:SprintBrandLogo.jpg
Type	Public (NYSE: S)
Founded	1899
Location	Reston, Virginia (World Headquarters) Overland Park, Kansas (Operational Headquarters)
Key people	Gary Forsee, President & CEO Timothy M. Donahue, Chairman Judith A. Muhlberg, SVP Corp. Communications
Industry	Communications Services
Products	Telecom, Internet services, Wireless, BlackBerrys, GPS, CDMA (Sprint PCS), iDEN (Nextel), Push to talk
Revenue	Image:Green up.png$68.99 billion USD (2006)
Operating Income	{{{operating_income}}}
Net Income	{{{net_income}}}
Employees	80,000
Website	Sprint
{{{footnotes}}}

Sprint Nextel Corporation (NYSE: S), headquartered in Reston, VA, is one of the largest telecommunications companies in the world, with a combined market capitalization of $68.99 billion as of early 2006. It operates the third largest wireless network in the U.S. based on total wireless customers—behind Cingular Wireless and Verizon Wireless—with 45.6 million subscribers, under the Sprint PCS and Nextel brands. It also operates landline and long distance business, as well as several units that provide businesses and governments with communications services. The new company, formerly known as Sprint Corporation, was created from the $35 billion purchase of NEXTEL Communications by Sprint, though the entire deal was billed as a merger of equals.

The company maintains operational headquarters in Overland Park, Kansas.

1 History
2 Sprint Nextel today
3 Major sponsorships
4 Sprint Nextel Competitors
5 External links

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History

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Sprint

Image:SprintLogo.jpg The Sprint Corporation was founded in 1899 by Cleyson Brown under the Brown Telephone Company in the small town of Abilene, Kansas. The company was a landline telephone company that operated as a competitor to the Bell System.

In the mid 20th century, Brown changed its name to United Utilities. That company changed its name to United Telecommunications in 1972, as it began to offer a more diversified product range.

Southern Pacific Communications Company (SPCC), a unit of the Southern Pacific Railroad began offering their dial-up service shortly after the Execunet II decision late in 1978. The Railroad had extensive rights of way that could be used to lay long-distance communications. Prior attempts at offering long distance service were disapproved by the Federal Communications Commission, though the company's fax service (SpeedFAX) had been permitted. According to company employees, Sprint was a name chosen by a contest sponsored within the company by Rex Hollis, the VP of Marketing at the time. Some claim it was a acronym for "Southern Pacific Railroad Information NeTwork" or "Switched PRIvate Network Telecommunications."

Southern Pacific Communications became part of GTE in 1982. In 1986, Sprint was merged with US Telecom (the long distance arm of United Telecom) to form US Sprint. This was a partnership owned by GTE and United Telecom. In 1989 United Telecom purchased controlling interest in US Sprint. In 1991 United Telecom completed its acquisition of US Sprint. That same year United Telecom changed its name to Sprint (dropping the "US").

In 1995, the company began to offer wireless service under the Sprint PCS brand.

On October 5, 1999 Sprint and MCI WorldCom announced a $129 Billion dollar merger agreement between the two companies. The deal would have been the largest corporate merger in history at the time. However the deal did not go through because of pressure from the United States Department of Justice and the European Union on concerns of it creating a monopoly.

In 2003, Sprint began recombining their local telecom, long distance, wireline, and wireless business units into a new company, marketing the combined company as "One Sprint". In April 2004, the separately-traded wireless tracking stock, "PCS", was absorbed into the New York Stock Exchange (NYSE) "FON" ticker symbol, Sprint's former ticker symbol. (FON stood for "Fiber Optic Network", which was Sprint's bragging right, but was also a homophone of the word "phone".)

In 2005, Sprint merged by buying out competitor Nextel, forming Sprint Nextel,

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NEXTEL

Image:NextelLogo.png NEXTEL was founded as FleetCall in 1987 by Morgan E. O'Brien, a Washington, DC, communications attorney, and changed its name to NEXTEL Communications in 1993. In 1995, wireless pioneer Craig McCaw became a significant investor in the company. Mark Warner, a former Virginia Governor and possible 2008 presidential candidate was one of the company's co-founders.

NEXTEL was formerly traded on the NASDAQ under the ticker "NXTL".

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Merger of Sprint and NEXTEL

On December 15, 2004, Sprint and NEXTEL announced they would merge to form Sprint Nextel Corporation. While billed as a merger of equals, the transaction was actually the purchase of NEXTEL Communications by Sprint Corporation. At the time of the merger announcement Sprint and NEXTEL were the No. 3 and No. 5 leading providers in the US mobile phone industry.

Sprint and NEXTEL shareholders overwhelmingly approved the merger on July 13, 2005. The merger deal was approved by the Federal Communications Commission (FCC) and U.S. Department of Justice on August 3, 2005. The FCC placed a condition on the merger that Sprint Nextel is to provide wireless service within the 2.5 GHz band within the next four years. Sprint Nextel was officially formed on August 12, 2005, when the deal was completed.

Sprint and NEXTEL both faced opposition to the merger, mostly from regional affiliates that provide wireless services on behalf of the companies. These regional affiliates felt that the new company would be violating non-compete agreements that the former companies had made with the affiliates. Sprint Nextel has made a settlement with an affiliate named Ubiqutel that Sprint won't be providing any Nextel service within the Ubiqutel service limits. Other affiliates have also filed lawsuits against Sprint Nextel.

Nextel is known for its free incoming call plan.

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Sprint Nextel today

Sprint Nextel currently offers cellular phone service under its Sprint PCS and Nextel brands. It is also a provider of landline, long distance, and business telecommunications, and is a Tier 1 Internet service provider under the name SprintLink.

Sprint Nextel also offers pre-paid services through the Boost Mobile brand, and it provides services in the Philippines through the Next Mobile brand. Sprint Nextel wholesales capacity on its PCS wireless network to companies called Mobile Virtual Network Operators (MVNO); this means the MVNO uses the Sprint PCS network for coverage. The MVNOs resell wireless services using their own brand. Current MVNOs using the PCS network to provide coverage include Virgin Mobile, EarthLink, Working Assets, Telispire, Excel Wireless, STI Mobile, Liberty, Powernet Global, Platinum Tel, ConnexOne, and Qwest. Sprint Nextel has also announced other upcoming MVNO partnerships, including ESPN, Movida Wireless, and Disney.

Image:EmbarqBrandLogo.jpg Sprint Nextel is expected to spin off its local telephone division into a separate company officially named Embarq Corporation and traded on the New York Stock Exchange under the symbol EQ. The new local phone company will be the fifth largest local exchange carrier in the United States (under the Baby Bells) and the largest independent local provider, serving customers in 18 states and providing local, long distance and high-speed data services to residential and business customers.

In 2005, Sprint Nextel acquired three of its wireless affiliates, US Unwired (deal closed in August), Gulf Coast Wireless (deal closed in October), and IWO Holdings (deal closed in October). Analysts speculate that Sprint Nextel will acquire additional affiliates.

On September 1, 2005, Sprint Nextel combined plan offerings of its Sprint PCS and Nextel brands to bring more uniformity across the company's offerings.

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Logo

The new logo of the Sprint Nextel Corporation was one of the first attempts at seamlessly meshing the initial brands of both the Sprint Corporation and NEXTEL Communications. The logo is a blend of the former Sprint "pin drop" marketing image as well as the colors of Nextel's bright yellow and black logo design with its cellular service level bars that, in past marketing, would get "typed" from a single vertical black line [1]. The company also continues to reinforce the idea of a combination of brand strengths on several levels of marketing including a voice over exclaiming "Sprint, together with Nextel" or "Nextel, together with Sprint" as a way to play on the idea of a merger of equals.

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Sprint PCS

Image:Sprint nextel true logo.jpg Sprint PCS is the main wireless brand of Sprint Nextel, and was the main brand of the former Sprint Corporation.

The Sprint PCS network operates a 3G wireless network, using the 1xRTT standard, which is part of the Code Division Multiple Access (CDMA) standard. Sprint is currently rolling out a higher speed wireless network using EV-DO technology. They expect to spend over two and one half billion dollars upgrading the existing network to EV-DO technology.

Sprint's EV-DO (Power Vision) offering includes Sprint TV, Sprint Radio (both streaming and SIRIUS satellite music) Stations, Sprint's Music Store, Sprint On-Demand, unlimited Web access, video and picture mail, wireless chat, and games. It is currently being offered in 41 states in the US.

Unlike Verizon's EV-DO offering, Sprint's Power Visions content is available off of Sprint's EV-DO network. The speeds will be slower on the 1x network though. CDMA 1x data speeds can reach 144 Kbps, while EV-DO has bursts up to 2 Mbps.

Sprint Nextel maintains its nationwide PCS presence with the help of affiliates. These smaller companies, in agreement with Sprint, build network infrastructure as well as operate retail stores. In exchange, the smaller companies receive usage of Sprint's brand, radio spectrum, customer service and billing. In most cases, these affiliate carriers are transparent to the end user or consumer. Alamosa PCS is the largest of its affiliate carriers, the others are Ubiquitel, iPCS, Shentel, Enterprise, Northern PCS, and Swiftel. (See Merger of Sprint and NEXTEL section above) [2].

SprintPCS also offers WiFi 802.11 service in some major airports, cafes, hotels and convention centers.

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Nextel

Nextel is the former wireless brand of NEXTEL Communications, and it operates on Motorola's iDEN protocol that uses time division multiple access (TDMA) technology. Unlike other cellular operators, Nextel utilizes the specialized mobile radio band (SMR) and was one of the first operators in the United States to offer a national digital cellular coverage footprint.

Some of Nextel's special features include its push to talk feature, which simulates the half-duplex operation of a two-way radio. A downside of this sole-source (Motorola) and proprietary standard has been a lack of innovation in handset size and weight, compared to mobile telephony industry trends, though this too is changing.

The Nextel brand has over 18.5 million U.S. subscribers, particularly popular in the south.

Initially, speculation that current Nextel subscribers would be required to replace their existing handsets due to incompatibility between Nextel technology and Sprint technology was put forth. However, Sprint Nextel has assured its customers that both the current iDEN and CDMA technologies will continue to be supported and that dual-band phones are being researched to work on both networks simultaneously.

The push-to-talk feature with which Nextel has gained its fame is also expected to be released on the CDMA network in 2006 when Sprint deploys their successor to the first phase of their high-speed wireless EV-DO network. The new push to talk platform will be based on Qualcomm's Qchat product, which has been under development between Nextel and Qualcomm since January 2002. Currenty Sprint PCS has a push-to-talk service called ReadyLink which is based on the SIP VoIP protocol but cannot currently make or receive calls with the iDEN based PTT system.

By 2010, Sprint Nextel plans to absorb the Nextel brand into the Sprint PCS brand. According to documentation filed earlier by Sprint, iDEN was, at that time, to be sold.

NII Holdings owns Nextel-branded networks in many Latin American countries, under license by Sprint Nextel, which owns 18% of that company.

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Forced acquisitions and settlements

Prior to the merger, the Sprint Corporation and Nextel Communications were dependent on a network of affiliated companies. Following the announcement of the merger agreement, some of of these affiliates came forward with a strong opposition to the Sprint Nextel merger on the grounds that the merged company may violate existing agreements or significantly undercut earnings to these affiliates. Some had even threatened to push for the outright blocking of the merger.[3] In order for Sprint Nextel to allay some of this opposition by affiliates, they were forced to initiate discussions of either acquiring some of these affilates or renegotiate existing agreements. In several cases the newly formed company was forced to acquire affiliated companies in exchange for them dropping their opposition of the merger.

Below are some of those companies which Sprint Nextel has agreed to acquire:

August 12, 2005: Sprint acquires the Sprint PCS affiliate US Unwired for $1.3B. Thus adding some 500,000 additional direct customers to the Sprint Nextel company. [4]
August 30, 2005: Sprint Nextel announces the intention to acquire IWO Holdings, Inc. a mainly New England-based network affiliate for the Sprint PCS business. (This acquisition closed on October 20, 2005.)
Another acquisition forced by Gulf Coast Wireless, added an additional 95,000 customers mainly in Louisiana and Mississippi to Sprint Nextel's CDMA network. (With that closing on October 3, 2005).
November 21, 2005: Sprint Nextel announces a $4.3B. acquisition agreement for Texas-based Sprint PCS affilate Alamosa Holdings. Potentially adding an additional 1.48 million customers to Sprint Nextel.
December 16, 2005: Sprint Nextel announces a $98 million agreement to acquire Enterprise Communications of Columbus, Georgia, thus adding over 52,000 customers to the company's PCS Wireless division.[5]
December 16, 2005: Sprint Nextel announces acquisition of non-affiliate Velocita Wireless. The transaction will enhance the iDEN network's 900 MHz spectrum position. [6] - (velocitawireless.com)
December 21, 2005: Sprint Nextel Corporation and Nextel Partners, Inc. [7] finally reach an agreement for a $6.5B deal where the Sprint Nextel Corporation will acquire the largest of Nextel's affilates to end Nextel Partners' opposition to any changes by Sprint in relation to the NEXTEL merger. [8]. Once completed the Nextel Partners deal will add more than 2 million customers directly to the Sprint Nextel company.

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Major sponsorships

Image:NASCARNextelCupLogo.png Sprint Nextel is the major title sponsor of NASCAR’s top racing series, called the NEXTEL Cup. It is expected that the name of the series will be changed to the Sprint Cup for 2007.

Sprint Nextel also holds naming rights to the Sprint Center in Kansas City, Missouri.

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