Sprint Nextel Corporation

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Sprint Nextel Corporation
Brand logo
Type Public
Founded 1899
Location Reston, Virginia (main)
Overland Park, Kansas (operations)
Key people Gary D. Forsee, President & CEO
Timothy M. Donahue, Chairman
Industry Communications Services
Products Telecom
Revenue image:green up.png$40.8 billion USD (2004)
Employees 80,000
Website Sprint Nextel Corporate Information

Sprint Nextel Corporation (NYSE: S), headquartered in Reston, Virginia, is one of the largest telecommunications companies in the United States. It operates the third largest wireless network in the U.S. with nearly 44 million subscribers, under the Sprint PCS and Nextel brands--behind Cingular and Verizon Wireless. It also operates landline and long distance business, as well as several units that provide businesses and governments with communications services. The 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 an operational headquarters in Overland Park, Kansas.

Contents

History

Sprint

Former Sprint logo
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Former Sprint logo

The legacy Sprint Corporation was founded in 1899 by Cleyson Brown under the Brown Telephone Company name 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."

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, Sprint's former ticker.

Sprint was the first U.S. carrier with innovations such as the first camera phone (Sanyo SCP-5300), and the first 2.0 megapixel camera phone (Samsung MM-A800).

NEXTEL

Former NEXTEL logo
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Former NEXTEL logo

NEXTEL was founded as FleetCall in 1987 and changed its name to NEXTEL Communications in 1993. In 1995, wireless pioneer Craig McCaw became a significant investor in the company.

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

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.

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, business telecommunications, and 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, and Qwest. Sprint Nextel has also announced other upcoming MVNO partnerships, including ESPN, Movida Wireless, and Disney.

Sprint Nextel is expected to spin off its local telephone company, Sprint LTD, into a separate company. Sprint LTD services 18 states in the U.S. and provides 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.

Sprint PCS

One of the advertising logos
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One of the advertising logos

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 on the 3G wireless standard, which is part of the Code Division Multiple Access (CDMA) standard.

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).

As of 2004, the Sprint PCS brand had nearly 25 million subscribers in the U.S.

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 16.1 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 network EV-DO. 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 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.

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

Important events

Please note that this list is merely partial.

  • 1987 Nextel was first formed by Morgan O'Brien, under the name Fleet Net, company was renamed to Nextel in 1993. Soon after founding Fleet Net is merged with Dial Call and OneComm, gains investment and by the middle of 1995 Nextel aims to service the top 50 US markets. [1]
  • December 15, 2004: Sprint and Nextel Communications, Inc. announced agreement for a merger. [2]
  • August 12, 2005: Sprint and Nextel Communications, Inc. complete their merger. after gaining full Federal approval on August 3, 2005. [3], [4]
  • October 31, 2005: The Sprint Music Store officially launched for PCS customers. EMI Music, Sony BMG Music Entertainment, Warner Music Group and Universal Music Group are the initial members.
  • November 2, 2005: US-based Cable television providers Comcast, Time Warner Cable, Cox Communcations and Advance/Newhouse Communications announce a new partnership with Sprint Nextel Corporation to offer Sprint Nextel's service as part of a cable package to their customers. [5]

Major sponsorships

NASCAR Nextel Cup logo

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 hold naming rights to the Sprint Center in Kansas City, Missouri.

Sprint Nextel competitors

External links


American mobile phone companies
7-Eleven Wireless | ALLTEL | Boost Mobile | Cincinnati Bell Wireless | Cingular Wireless | Cricket Communications | Dobson Cellular | Edge Wireless | MetroPCS | NEXTEL | Qwest Wireless | Sprint | T-Mobile | TracFone | U.S. Cellular | Unicel | Verizon Wireless | Virgin Mobile
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