Sprint Nextel

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Sprint Nextel Corporation (NYSE: [S]), headquartered in Reston, Virginia, is one of the largest telecommunications companies in the world, with a combined market capitalization of $77.1 billion as of early 2006. It operates the third largest wireless telecommunications network in the U.S. based on total wireless customers—behind Cingular Wireless and Verizon Wireless—with 51 million subscribers, under both the Sprint PCS and Nextel brands. The Sprint Power Vision EV-DO network is the largest wireless broadband network in the U.S. They are also a provider of landline, long distance, and is a Tier 1 Internet service provider under the name SprintLink. As well as operating 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. Both internally and externally, Sprint is an acceptable short name for the company.

The company maintains its operational and engineering offices in Overland Park, Kansas.

History

Sprint

The Sprint Corporation was founded in 1899 by Cleyson Leroy 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 not approved by the Federal Communications Commission, though the company's fax service (SpeedFAX) had been permitted. SPC was headquartered in Burlingame, California (where Sprint still maintains a small presence on Adrian Ct.). 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. It was an acronym for "Southern Pacific Railroad INTegration".

In 1993, Sprint acquired Centel, which allowed Sprint to provide local service in a total of 18 states.

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").

Nextel

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 early investors. Daniel Akerson served as CEO of Nextel for part of his career.

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

Merger of Sprint and NEXTEL

Sprint 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.

Nextel is known for its free incoming call plan. However, since the merger Nextel Customers are now able to convert their plans to the Sprint side, and Sprint Customers can convert their accounts to the Nextel side. Both changes, would require purchasing new phone equipment however, Sprint Nextel may buy-back fairly new but used cell phones for up to $40.

Popular features from each side have been incorporated into the other - Sprint now offers Free Incoming plans, and Nextel now offers Fair & Flexible plans.

Sprint Nextel today

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, [9278 Mobile], Virgin Mobile, [EarthLink Wireless], [BeyondMobile], [Working Assets],[Telispire], [Excel Wireless],[STI Mobile], [Liberty Wireless], [Powernet Global], [PlatinumTel],[ConnexOne], Mobile ESPN, Disney Mobile, [Movida Wireless], Helio, [Primus Wireless], [Voce], Jitterbug Wireless, and Qwest.

Embarq

Sprint Nextel spun 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 local phone company is 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.

Embarq became a fully separate company on May 17, 2006. It is headquartered in Overland Park, KS.

Quadruple Play

Affiliate acquisition

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.

Customer privacy scandal

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. http://www2.sprint.com/mr/news_dtl.do?id=7020 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.

Sprint PCS

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 2.5 billion dollars upgrading the existing network to EV-DO technology. As of early 2006, Sprint's EV-DO Power Vision network reached more then 150 Million people. It is expected to reach 190 Million people by the end of 2006. Sprint has announced plans to continue upgrading their 3G EV-DO network, until it reaches 260 Million people in 2007.http://www.xchangemag.com/tdhotnews/61h19121111.html By the end of 2007, Sprint expects to have fully rolled out their EV-DO Rev.A network-wide. http://www2.sprint.com/mr/news_dtl.do?id=11040 Sprint Nextel have also stated plans to invest $7 Billion this year to improve its network.http://www.wirelessweek.com/toc-newsat2direct/04/10/06

On May 9, 2006 Sprint Nextel and Alltel agreed on a new Nationwide Roaming partnership. [Sprint News Release], [Alltel news Release] The new roaming agreement is for both voice and (1x & EV-DO) data roaming coverage. This new partnership is different from Alltel's voice only roaming agreement with Verizon Wireless. The new agrrement is (reciprocal), meaning customers from both companies get to roam on to each other's networks. Giving Alltel customers access to Sprint's 1x & EV-DO network, and Sprint customers access to Alltel's denser rural 1x & EV-DO voice and data coverage. This agreement represents the first of it's kind between US wireless carriers.

Sprint's EV-DO (Power Vision) data options include Sprint TV, Sprint Radio (both streaming and SIRIUS satellite music) Stations, Sprint 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.

Sprint's Vision data access starts at $10 a month regardless of whether the phone is a standard or PDA Smart-Device phone.

Unlike Verizon's EV-DO offering, Sprint's Power Vision content is available in areas without EV-DO coverage, albeit at the lower speeds of the 1xRTT network. CDMA 1x data speeds can reach 144 Kbps, while EV-DO Currently has bursts of up to 2 Mbps.

While many CDMA carriers like Verizon have chosen to use the BREW interface on their phones, Sprint has opted to use the more widespread Java interface for their phone's application support. This allows for the use of Third-Party software applications like the wireless phone web browser Opera Mini, services like Google maps, or free e-mail client [Flurry Mail], and other free software applications.

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. This has also given Sprint a unique advantage over other carriers, in that their entire network was built for Sprint. Other national carriers coverage areas are made up of merged and acquired networks, which can cause inconsistent network harmony and other related problems.

Alamosa PCS (WAS) the largest of its affiliate carriers. Sprint Nextel completed the acquisition of Alamosa Holdings on February, 2 2006. Other affiliates include Ubiquitel, iPCS, Shentel, Enterprise, Northern PCS, and Swiftel. (See the Forced acquisitions and settlements section below for more details on acquisitions)

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

Of historical note, when Sprint began offering wireless service in 1995 in the Baltimore-Washington metropolitan area, it was the very first PCS-based wireless network in the Americas. Interesingly however, while today Sprint's PCS network utilizes CDMA, the Washington area network was actually GSM. Eventually Sprint converted that network to CDMA, then sold the GSM infrastructure in 1999 to Omnipoint (which eventually became part of T-Mobile USA).

Sprint Music Store

On October 31, 2005 the Sprint Music Store officially launched for PCS customers. Initial record-label participation included: EMI Music, Sony BMG Music Entertainment, Warner Music Group and Universal Music Group. According to claims made by Sprint, the service has become such a hit that by February 15, 2006 one-million songs had been downloaded.http://www2.sprint.com/mr/news_dtl.do?id=10360 Then by June 27, 2006 the store had reached over 4 million downloads. http://www.wirelessweek.com/toc-newsat2direct/06/27/06?starting=2

NEXTEL

Some of Nextel's special features include its push to talk feature, which simulates the half-duplex operation of a two-way radio, as well as GPS integration in later handsets. However, there are several downsides related to using this proprietary Motorola technology standard. It has been suggested there has been a lack of innovation in handset size, weight, and function compared to cellular industry trends, though many believe this has begun to change as result of the Sprint Nextel merger.

Initially, there was much speculation that current Nextel subscribers would be required to replace their existing handsets due to incompatibility between the standards used on both the Nextel and Sprint PCS network. However, since the time of the merger, Sprint Nextel has been working to assure its customers that both the current iDEN and CDMA technologies will continue to be supported for the current-time and that dual-band phones are being developed which will work on both networks simultaneously. Sprint Nextel plans to make a major marketing push in 2008 to convert users of the iDen network to CDMA users.

The push-to-talk (PTT) feature, with which Nextel has gained popularity, is expected to be made interoperable between the Sprint and Nextel networks by 2008. Currenty, Sprint PCS has its own push-to-talk service called ReadyLink which is based on the SIP VoIP protocol. Due to the difference in technology, users of the ReadyLink service cannot make or receive push-to-talk calls with users of the iDEN-based network. The integration of the two networks will be dependent on the deployment of Sprint's chosen successor to the first-phase of their high-speed wireless EV-DO network. The new push-to-talk platform is slated to be based on Qualcomm's Qchat product, which has been under development as a joint effort between both Sprint Nextel and Qualcomm since January 2002.

Nextel has recently upgraded their network to support the WiDEN packet-data protocol. This has allowed an increase in data speeds of up to 90 kbit/s. Currently, the Motorola i850, i860, and i870 are the only phones to support WiDEN.

By 2010, Sprint Nextel plans to absorb the Nextel brand into the Sprint PCS brand. According to earlier documentation filed sometime earlier by Sprint, the iDEN-based network was originally to be sold. http://mrtmag.com/mag/radio_idens_murky_future/

In addition to the US market, Nextel has licensed its identity to NII Holdings, a holding company of which Sprint Nextel owns 18%. They have used the Nextel brand to set -up networks in many Latin American countries.

Boost Mobile

Nextel phones

• Motorola iDEN phones

Nextel International

Nextel U.S. operations interfere with police and fire radios

Federal Communications Commission precedent calls for the party causing interference to solve the problem. The interference stems from Nextel's buy-out of private analog FM two-way radio systems. To expand capacity of their digital iDen systems, the company purchased private commercial two-way systems from small companies in cities nationwide. After purchase, the analog equipment was removed and replaced with Nextel's digital trunked system transmitters. In some cases, these new transmitters were configured in ways that caused interference to existing systems–including police and fire systems.

To resolve these problems, in August 2004 Nextel and the Federal Communications Commission developed a plan to move every government system on an 800 MHz frequency to a different band, (700 MHz). However, since radio equipment manufacturers do not currently make equipment for the new frequency band, costs and length of time needed to engineer, plan, and implement this very large project are unknown.State of Virginia PowerPoint presentation http://www.911.virginia.gov/ppt/Rebanding-Nextel.pptLuna, Lynette, "Nextel interference debate rages on," Mobile Radio Technology, 1 August 2003.Davidson, Paul, "Plan to clear the air for police radios hits a snag," U.S.A. Today, 16 June 2003.Contra Costa County Public Safety Mobile Radio Master Plan, Federal Engineering, Inc., June 18, 2002.

Forced acquisitions and settlements

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. http://www2.sprint.com/mr/news_dtl.do?id=7300
• 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 affiliate Alamosa Holdings. Potentially adding an additional 1.48 million customers to Sprint Nextel.[(Sprint Nextel Completes Acquisition of Wireless Affiliate Alamosa Holdings on February 1, 2006)]
• 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. [Sprint Nextel Acquires Enterprise Communications on January 31, 2006]http://www2.sprint.com/mr/news_dtl.do?id=9520
• December 16, 2005: Sprint Nextel announces acquisition of non-affiliate Velocita Wireless. The transaction will enhance the iDEN network's 900 MHz spectrum position. http://www2.sprint.com/mr/news_dtl.do?id=9540[Sprint Nextel Completes Acquisition of Velocita Wireless on February 28, 2006)]
• December 21, 2005: Sprint Nextel Corporation and Nextel Partners, Inc. http://premium.hoovers.com/subscribe/co/factsheet.xhtml?ID=99840 finally reach an agreement for a $6.5B deal where the Sprint Nextel Corporation will acquire the largest of Nextel's affiliates to end Nextel Partners' opposition to any changes by Sprint in relation to the NEXTEL merger. http://news.com.com/Sprint+Nextel+buys+affiliate+for+6.5+billion/2100-1036_3-6004341.html?tag=st_lh Once completed the Nextel Partners deal will add more than 2 million customers directly to the Sprint Nextel company.[Sprint Nextel Completes Acquisition of Nextel Partners on June 26, 2006)]
• April 20, 2006: Sprint Nextel Corporation and [Ubiquitelpcs Corporation] have reached an agreement where the Sprint Nextel Corporation will acquire Ubiquitelpcs, an exclusive Sprint PCS provider.[(Sprint Nextel Completes Acquisition of Ubiquitel on July 7, 2006)]

Major sponsorships

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 is the official wireless sponsor of the NFL. Sprint Nextel also holds naming rights to the Sprint Center in Kansas City, Missouri.

Sprint Nextel Competitors

• Cingular
• Verizon Wireless
• T-Mobile
• Alltel
• U.S. Cellular

• AT&T
• Verizon
• Qwest

Sprint References

In the computer game [[Space Quest V: The Next Mutation|Space Quest V]] by Sierra, the Sprint logo is shown at the end of communications from other ships. It is also featured on a billboard in the Space Bar and is included in the game's ending credits.

References

Notes

FY 2005) | Employees: 62,000 | Stock Symbol: NYSE: [S] | Website: [www.sprint.com]