Archived from groups: alt.cellular.fido (More info?)
Sprint buys Nextel.. What will become of Mike, now the Moto's large iden customer is dead? (The new company, over time, will move Nextel's network to the same technology that Sprint uses.)
NEW YORK (Reuters) - Sprint Corp. on Wednesday agreed to buy mobile telephone company Nextel Communications Inc. in a deal worth $36.3 billion to gain more business customers and more airwaves to transmit calls.
The deal, which was widely expected, would combine the No. 3 and No. 5 U.S. wireless carriers and create a new company with about 40 million customers, greatly narrowing the gap with industry leaders Cingular Wireless and Verizon Wireless.
Sprint plans to spin off its local telephone business to shareholders of the new company, to be called Sprint Nextel, as part of the deal.
The transaction values Nextel at $32.63 per share based on Tuesday's closing prices, representing a premium of almost 9 percent over Nextel's closing price of $29.99 on Nasdaq on Tuesday.
Nextel shares fell 10 cents to $29.89 in morning trade on Nasdaq, while Sprint shares fell 21 cents to $24.89 on the New York Stock Exchange (news - web sites).
The merger will attempt to smoothly combine 39 million customers using two divergent networks. Nextel has aimed its popular "push-to-talk" walkie-talkie service mostly at business consumers, who account for roughly three-fourths of its customer base. That ratio of business to consumers is flipped at Sprint, which has had a greater emphasis on retail customers and data services.
The companies, which have a combined market capitalization of about $70 billion, had combined revenue of $40 billion for the 12 months ended Sept. 30, including about $6 billion from Sprint's local telephone business.
Sprint and Nextel said they expect savings of about $12 billion from the deal, from reductions in capital spending and operating costs. Sprint Chairman and Chief Executive Gary Forsee said there would be job cuts, but he did not provide specifics. After its recent merger with AT&T Wireless, Cingular Wireless said it would cut about 10 percent of its work force, or 7,000 jobs.
Sprint and Nextel said they were forecasting integration costs of $1 billion to $1.3 billion in 2006, and an additional $200 million to $500 million in 2007.
The deal leaves T-Mobile USA, owned by Deutsche Telekom AG, a distant fourth among U.S. national wireless carriers, with about 16.3 million customers.
Under the terms of the deal, existing Sprint shares will remain outstanding and Nextel shares will be converted into shares of the new company and a small amount of cash, valuing each Nextel share at about 1.3 shares of Sprint Nextel common stock.
The stock and cash allocation will be determined at the closing to ensure the local business spinoff is tax free, and the cash portion of the deal will not exceed $2.8 billion. At current figures, Nextel shareholders would receive about 1.28 Sprint Nextel shares and 50 cents in cash for each Nextel share, the companies said.
Sprint Chairman and Chief Executive Gary Forsee is to become CEO of the new company, and Nextel CEO Timothy Donahue will become chairman. Sprint Chief Operating Officer Len Lauer and Nextel Chief Financial Officer Paul Saleh will maintain their roles at the new company.
The local telecommunications business will have its own management team and board of directors.
The spun-off local telecoms business is expected to pay quarterly dividends, but Sprint Nextel plans to stop paying dividends following the spinoff, the companies said.
The deal, which is subject to shareholder and regulatory approval, is expected to close in the second half of 2005. Analysts widely expect regulators to approve the deal.
The new company, over time, will move Nextel's network to the same technology that Sprint uses.
Archived from groups: alt.cellular.fido (More info?)
On Wed, 15 Dec 2004 16:13:35 GMT, <malingerer@gmail.com> wrote:
>Sprint buys Nextel.. What will become of Mike, now the Moto's large iden >customer is dead? (The new company, over time, will move Nextel's network to >the same technology that Sprint uses.)
Unless they can get PTT down on CDMA networks they're in for a rough
go of it. Part of what makes Nextel and other iDen networks as
attractive as they are is their finished implementation of PTT which
Nextel calls "direct connect." At present the implementation of PTT
on CDMA networks is far from great and has a good way to go before it
even approaches the way direct connect works on Nextel's iDen network.
Archived from groups: alt.cellular.fido (More info?)
Joseph wrote:
> Nextel calls "direct connect." At present the implementation of PTT
> on CDMA networks is far from great and has a good way to go before it
> even approaches the way direct connect works on Nextel's iDen network.
In one article I read, Sprint gives itself until 2008 to complete the
integration of Nextel customers onto its CDMA network.
Effective immediatly, Motorola won't be so interested in spending much money
on Iden. Loss of Iden business will be significant for Moto.
The Razor couldn't have come at a better time, it will reduce the negative
impact of the loss of iden business.
