An article published in the Wall Street Journal states that Sprint is “seriously considering” spinning off Nextel. The Nextel division is Sprint has been causing problems with debt, and the common consensus is that it was a mistake for Sprint to purchase them. The source for the article are ‘people close to the situation’, so take that at face value.
Sprint themselves would not comment on the rumor, this is of course the expected corporate response. If the unnamed sources in the article are right though, this could usher in some serious changes in Sprint Nextel. One potential buyer is Cyren Call, who are reportedly getting ready to “assemble a consortium of investors to acquire Nextel as part of its plans to create a nationwide wireless network for public safety communications”.
The article says Sprint could be considering other buyers for Nextel as well. Mainly, other buyers means private equity firms. The Wall Street Journal’s sources also stated Sprint is preoccupied “with other matters”. Without Nextel, Sprint themselves may be a much more attractive takeover target. Maybe Deutsche Telekom will step up now?
Sprint should have never bought Nextel. At the time that the merger was announced, most Sprint employees were scratching their heads because their iden network was totally incompatible with the Sprint CDMA network. The cost of running two parralel networks was staggering by itself.
Donahue perpetuated the biggest con ever with the merger. Sprint was sold a network that was near, or at capacity; the cost to upgrade the Nextel iden network has crippled Sprint’s ability to implement other potential revenue generating projects. Even now Sprint struggles to continue to go it alone with their groundbreaking WiMax network, Xhom.
The problems with the iden network has resulted in Sprint losing iden customers by the hundreds of thousands. The iden problems have also resuled in overloading calls to customer service, contributing to Sprint’s customer service problems.
It will be interesting to see what the summer brings.