Sprint Corporation
Sprint Nextel is to be a new cell phone company created by the announced merger of Sprint and Nextel to be completed by the second quarter of 2005. The merger deal is pending shareholder and regulatory approval.
Sprint Nextel's executive headquarters will be located in Reston, Virgina and their operational headquarters will be located in Overland Park, Kansas.
Sprint Nextel's common stock will be listed on the New York Stock Exchange (NYSE).
According to the media release that was jointly released by Sprint and Nextel, Nextel's push to talk service will be migrated to the CDMA network.
Expected Merger Results
The merger between Sprint and Nextel will create the third largest cellular company in the United States, behind number one Cingular and number two verizon.
The "merger of equals" is intended to help both companies increase their hold in weak markets - for Sprint, this merger means improving their hold in the Business industry of which 75% of Nextel's consumer base consists. For Nextel, the exact opposite is true.
Sprint will "spin-off" it's local telephone company (Sprint LTD) in to it's own company. As of this writing, Sprint LTD services 18 states in the US and provides local, long distance and high-speed data services to residential and business customers.
Potential Merger Difficulties
While the FCC is always a potential danger to any telecommunications merger, Sprint Nextel is expected to merge without any serious FCC interference.
The real problem stems from the differences in Sprint and Nextel's networks. Sprint uses the CDMA format (Code Division Multiple Access) while Nextel uses its very own iDen network which runs in the 900 mHz frequency range. While Nextel is expected to use CDMA when the newest version of the network releases, moving millions of customers - especially business customers to whom time is money - will certainly be a challenge.
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 thier high speed wireless network EVDO. 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.