Tech sector geeks: is the proposed Nextel/Sprint merger a good thing?

[JimNasium]

I'm a Sprint PCS customer but don't know enough about such things to make an informed opinion.

Story (http://www.nytimes.com/2004/12/10/technology/10tele.html?ei=5006&en=bb43703ba8e4dc0c&ex=1103259600&partner=ALTAVISTA1&pagewanted=print&position=)

December 10, 2004
Nextel Said to Be in Talks With Sprint
By ANDREW ROSS SORKIN and KEN BELSON

Nextel Communications is in advanced talks to merge with the Sprint Corporation, according to executives involved in the negotiations. The deal would form the third largest cellphone company in the nation, with 39 million wireless subscribers.

A deal could be reached as early as next week if the talks continue apace. In the meantime, the talks may bring to the game a third player, Verizon Wireless, which held several internal conference calls yesterday to discuss the possibility of making a run at Sprint, executives close to Verizon Wireless said.

Whatever the outcome, the industry appears ready to shrink once again, just six weeks after Cingular's acquisition of AT&T Wireless formed the largest mobile phone provider in the country with 46 million subscribers, surpassing Verizon Wireless with 42 million. The talks between Sprint, currently No. 3 in the market, and Nextel, No. 5, are also in part a response to Cingular's move, which forced other rivals to reconsider their competitive positions.

A merger of Sprint, which provides wireless service and traditional fixed-line service, and Nextel, best known for its push-to-talk walkie-talkie feature and loyal business customers, would marry two very different businesses and an assortment of overlapping and conflicting technologies.

Executives close to the Nextel-Sprint negotiations say the talks are at a particularly delicate point and may well collapse. The negotiations took on a sense of urgency in recent weeks because the market valuations of the companies had become more aligned - Nextel and Sprint had each been worth about $31 billion - allowing for the possibility that the companies could call the deal a merger of equals and take advantage of certain tax efficiencies.

But yesterday, as shares of Nextel and Sprint rose significantly after the negotiations were reported on CNBC, the executives said that they had begun to worry that the talks might fall apart because Nextel's market value was now about $32 billion and Sprint's had jumped to $36 billion. Shares of Nextel, which rose 6.6 percent, closed at $29.81. Shares of Sprint rose 7.9 percent, closing at $24.28.

When comparing wireless units, Nextel is the more valuable carrier. Though it has eight million fewer subscribers than Sprint, Nextel's customers pay nearly 10 percent more each month. Nextel's customer turnover rate - a crucial industry gauge - is half that of Sprint's. Nextel is also more profitable than Sprint. Almost one-quarter of Sprint's 23 million customers come from wholesale agreements with resellers like Virgin Wireless, and more than half of Sprint's revenue still comes from its shrinking fixed-line services.

The merger talks, which have been on and off for years, resumed in earnest last month after federal regulators moved closer to resolving the thorny problem of Nextel's radio spectrum, some of which overlaps with airwaves used by public service agencies, the executives said.

The Federal Communications Commission said that it wanted to give Nextel 10 megahertz of valuable 1.9-gigahertz spectrum in return for abandoning other spectrum it holds. Nextel will also have to pay several billion dollars to help public agencies take over its older spectrum. The offer, which Nextel has not yet approved, lifted a cloud of uncertainty which had hung over the company.

"It's no coincidence that things are heating up now that spectrum swap is getting done," said Jonathan Schildkraut, an analyst at SG Cowen & Company. "No one wanted to inherit the uncertainty."

Nextel has been an unusual player in the wireless phone industry. Unlike the other major wireless companies, it has built its network using 700-, 800- and 900-megahertz radio spectrum. For the most part, the rest of the industry, including Sprint, uses 1.9-gigahertz radio spectrum. That difference has forced Nextel to rely on its own network technology, which is not used by its competitors. Its technology is less able to provide high-speed data services that are seen as the future of the industry.

As Nextel moves into the 1.9-gigahertz spectrum, it will need to upgrade its network; in the event of a merger with Sprint, that technology would need to be compatible with Sprint's.

Roger Entner, a telecommunications industry analyst with the Yankee Group, a market research firm, said Nextel, if it merged with Sprint, "would not have to build that network all over again." Moreover, he argued, the two companies have complementary customer bases, because Sprint is stronger in the consumer market and Nextel is the best in the industry at serving businesses. "Sprint has cracked the code reasonably well on consumers and Nextel on business," he said, adding that the idea the two companies would merge is "a plausible story."

Still, a deal would have to overcome enormous hurdles. The combined company would most likely have to spin off or sell Sprint's traditional landline business, a potentially complicated process of breaking off pieces of the company. The combined company would also have to develop more wireless phones that work on both networks.

Matt Richtel, in San Francisco, contributed reporting for this article.

[memyselfI]

Wow, I was thinking of signing up with Nextel but seeing that they might end up with Sprint, I think I'll pass. People I've known who had Sprint hated it.

Thanks for the headsup!

[JimNasium]

Wow, I was thinking of signing up with Nextel but seeing that they might end up with Sprint, I think I'll pass. People I've known who had Sprint hated it.

Thanks for the headsup!
I don't hate Sprint but cannot give it a glowing endorsement either. My complaints with them center around marginal customer service and a coverage area that disappears when you get out of earshot of a major highway. Their prices and plans mesh with my needs though so I have chosen to overlook these shortcomings.

[dirk digler]

I use Sprint right now until I my contract expires in January. I am going to move to T-mobile but I have always wanted Nextel but they don't have service where I live.

[morphius]

Well, if Sprint can get Nextel's customer service, and drop its own system it will be a good thing. Looking at the coverage maps they both seem to cover major cities and some of the interstates, so it really isn't going to help coverage area much at all. Sprint also has the walkie talkie feature, that is every bit as good as Nextels (according to customers), but with limited advertising in business rags, nobody knows about it. I'm not sure Verizon was ever able to get theirs fixed, when it came out it was complete garbage because they rushed it to market.

The one thing Sprint has done well is plan for the future network upgrades and choosing CDMA to start with. With their upgrade to "3G" technology they also set up their network for future growth as well.

It should be intresting, because Nextel's upgrade is going to cost them a bundle.

[unlurking]

Have always hated Sprint. This could "help" current Sprint subscribers, but I think it more likely to hurt current Nextel subscribers.

[morphius]

Have always hated Sprint. This could "help" current Sprint subscribers, but I think it more likely to hurt current Nextel subscribers.
Like I said, if Sprint just buys their customer service it would be a HUGE step in the right direction for Sprint customers at least.

It is never hard to find anyone that HATES any of the cell phone companies, and after seeing how the technology works, its just damn surprising that you get a dial tone.

[HC_Chief]

Nextel employees should start bracing themselves now for the quarterly "Oh my God, are they going to lay off our division?" meetings.

[unlurking]

Like I said, if Sprint just buys their customer service it would be a HUGE step in the right direction for Sprint customers at least.

It is never hard to find anyone that HATES any of the cell phone companies, and after seeing how the technology works, its just damn surprising that you get a dial tone.
True.

I have had just about every service over the last 10 years available in Colorado. Customer service wise, Sprint was the worst. Have to wait and see on this one.

[Eleazar]

I used to work for Sprint so I've only ever had a Sprint PCS phone, but I've never had any trouble with it.

Trust me, I have no love for the company as a whole, but I can't complain about the wireless service. They have always done me right, and I have never had trouble with the coverage area.

[HC_Chief]

I used to work for Sprint so I've only ever had a Sprint PCS phone, but I've never had any trouble with it.

Trust me, I have no love for the company as a whole, but I can't complain about the wireless service. They have always done me right, and I have never had trouble with the coverage area.

You must not live near the campus. How stupid is it that coverage drops at pretty much every major intersection near the CORPORATE HEADQUARTERS?! :rolleyes:

Sprint was a great company to work for, constant worries about getting laid off notwithstanding.

[beavis]

You must not live near the campus. How stupid is it that coverage drops at pretty much every major intersection near the CORPORATE HEADQUARTERS?! :rolleyes:

Sprint was a great company to work for, constant worries about getting laid off notwithstanding.
I lived less than a mile from the campus when I worked there, and never had a dropped call in that area in 2 years. I understand the beef people would have with the customer service (or lack thereof), but I never had even the slightest issue with my phone.

As far as the merger goes, this is pretty much inevitable. Probably won't be the last one either. I actually expected it to come a lot sooner than this.

Good news for me is I didn't sell all of my FON stock after I quit. :)

[redbrian]

As far as coverage goes, Nextel has the best I have encountered.
Case in point, I have a job going on near Polo Mo.
There is a dead zone that encircles that area.
We had guys out there with damn near every service under the sun.
The only one who could get any reception was the crew with NEXTEL (now they did have to stand on an earth mound hold one foot in the air and face east, but they did get reception).

[Eleazar]

You must not live near the campus. How stupid is it that coverage drops at pretty much every major intersection near the CORPORATE HEADQUARTERS?! :rolleyes:

Sprint was a great company to work for, constant worries about getting laid off notwithstanding.

I didn't live near the campus but I did work there for a while. I always heard that calls dropped a lot in that area, but never experienced it myself, except in elevators or something.

I don't really think it was that great of a company to work for. I dont know if it was just them, or if it's the nature of the beast working for a monolithic company of that size, but it was like a politics fantasy football league. And anytime you heard anything from management, you had to assume the opposite because they were never being forthcoming.

That was the main thing that I hated, you couldn't believe anything you heard from above. There were emails coming out all the time about how they weren't planning widespead outsourcing, or how they were going to reorganize but didn't anticipate any cuts, or something like that, but deep down you knew they would fire you 5 minutes ago if they thought it would save them a nickel.

[JimNasium]

I have never had trouble with the coverage area.
You obviously have never driven rural Missouri then. If I get off of a major thouroughfare I'm going to be either roaming or without a signal. Analog roam = instant battery death.

[beavis]

That was the main thing that I hated, you couldn't believe anything you heard from above. There were emails coming out all the time about how they weren't planning widespead outsourcing, or how they were going to reorganize but didn't anticipate any cuts, or something like that, but deep down you knew they would fire you 5 minutes ago if they thought it would save them a nickel.
This was my favorite. The CIO once tried to tell us that they had only laid off 6 people. If that was the case, then I knew all of them.

[Eleazar]

You obviously have never driven rural Missouri then. If I get off of a major thouroughfare I'm going to be either roaming or without a signal. Analog roam = instant battery death.

No, I don't go into really rural areas too much. Most of my time is in the KC area, but I have been to northwestern and northeastern missouri a few times without trouble that I can recall. :shrug:

[beavis]

You obviously have never driven rural Missouri then. If I get off of a major thouroughfare I'm going to be either roaming or without a signal. Analog roam = instant battery death.
Yes, most of Sprint's coverage is along major interstates and metropolitan areas, but they should have told you that when you signed up.

Analog roam is expensive as hell too.

[JimNasium]

Yes, most of Sprint's coverage is along major interstates and metropolitan areas, but they should have told you that when you signed up.

Analog roam is expensive as hell too.I'm sure it's in the fine print somewhere. It's usually not an issue unless we have an issue in the sticks or when I'm driving between Springfield and Jeff City. There are numerous deadzones on that trip.

[|Zach|]

I have used Sprint for a long time. Most of my troubles come from problems with the physical phones. I am going to try and get a new one for X-mas so we will see how that goes.

Their coverage has been pretty good IMO...no problems in Springfield, KC, or east of KC. When I am driving from Springtown to KC there are some area where I lose it for a while but its not to big of deal to me.

[|Zach|]

I'm sure it's in the fine print somewhere. It's usually not an issue unless we have an issue in the sticks or when I'm driving between Springfield and Jeff City. There are numerous deadzones on that trip.
Jim, if you let me sew this to your head you won't have anymore deadzone problems.

http://www.dynaflex.net/applicationnotes/grafico12.jpg

[BigRedChief]

you guys are all talking aboiut phone issues.

What about the new arena? What happens to it?

What about if Sprint leaves? Who buys the season tickets? What happens to the KC economy? Can we support the Chiefs if Sprint leaves?

[jAZ]

T-Mobile.

[beavis]

I'm sure it's in the fine print somewhere. It's usually not an issue unless we have an issue in the sticks or when I'm driving between Springfield and Jeff City. There are numerous deadzones on that trip.
They should have given you a map showing you where they had coverage.

[beavis]

I have used Sprint for a long time. Most of my troubles come from problems with the physical phones. I am going to try and get a new one for X-mas so we will see how that goes.

Their coverage has been pretty good IMO...no problems in Springfield, KC, or east of KC. When I am driving from Springtown to KC there are some area where I lose it for a while but its not to big of deal to me.
I'm not realy fond of their phones either. They seem to wear out quickly. Of course I do use the hell out of mine. I got a new one less than six months ago, and already some of the buttons don't work. That's more of a knock on Samsung than Sprint though.

[beavis]

you guys are all talking aboiut phone issues.

What about the new arena? What happens to it?

What about if Sprint leaves? Who buys the season tickets? What happens to the KC economy? Can we support the Chiefs if Sprint leaves?
I'm not sure about the the arena, that's a good question. I don't Sprint will be "leaving" though. I would think that the hq of the new company would still be in OP.

I doubt the percentage of season ticket holders that work for Sprint is high enough to have that big of an impact. Even if they all did get laid off.

[BigRedChief]

I'm not sure about the the arena, that's a good question. I don't Sprint will be "leaving" though. I would think that the hq of the new company would still be in OP.

I doubt the percentage of season ticket holders that work for Sprint is high enough to have that big of an impact. Even if they all did get laid off.

Sprint is the engine that powers the KC economy. We are not just talking about 35k losing their jobs we are talking about the other jobs being lost where those 35 k spend their sprint money. All the local companies that supply sprint with the supplies it needs. Sprint leaving would devestate the KC economy.

[HC_Chief]

Another company/companies would fill the void.

Short term, it would have a negative impact. Long term, nah.

[morphius]

Another company/companies would fill the void.

Short term, it would have a negative impact. Long term, nah.
Yeah, just like when small towns lost their manufacturing plants and turned into ghost towns. If you hadn't been paying attention, KC keeps dropping lower and lower in everything the way I see it.

[HC_Chief]

Yeah, Sprint leaving KC would also lead to Block, HNTB, Bibb & Associates, and a host of other headquartered Fortune 500/1000 companies leaving. :rolleyes:

Or did I just forget to put on my 'drama queen' undies today?

[morphius]

Yeah, Sprint leaving KC would also lead to Block, HNTB, Bibb & Associates, and a host of other headquartered Fortune 500/1000 companies leaving. :rolleyes:

Or did I just forget to put on my 'drama queen' undies today?
How many fortune 500 companies are HQ'd in KC?

Well it destroy the city, heck no, but it wouldn't be replaced anytime soon either.

[jynni]

You must not live near the campus. How stupid is it that coverage drops at pretty much every major intersection near the CORPORATE HEADQUARTERS?!

I've worked at the Campus for almost four years and have never had a problem with coverage or dropped calls. I also spend a great deal of time shopping in the Town Center area and have never had a problem.

I don't understand why people think coverage should be so good on and around the campus. Given that more than 10K people work there and probably about half have Sprint phones, it's gonna clog the network. Also when you consider the general cell phone use in Johnson county, it's a miracle that anyone call complete a call.

As for bad management, intra office politics and such, I have encounted the same type of stuff at every single place I've worked. From the IRS to Pottery Barn to Worlds of Fun.

Sprint has some of the better phones - try to stay with the Sanyo ones though, they are they best. Samsung seems to be hit and miss although they seem to be better as of late.

[KC Jones]

How many fortune 500 companies are HQ'd in KC?

Well it destroy the city, heck no, but it wouldn't be replaced anytime soon either.

2, and Sprint is one of them. KC will take a major step backwards once Sprint finally deals with their flailing business and has massive layoffs. I seriously doubt they leave the OP campus altogether though.

I've been waiting for the other shoe to drop at Sprint for a while now. I will most likely accelerate my plans to go from consulting to a perm position with this on the horizon.

BTW, the other one is Farmland IIRC

OOPs - I thought HRB and IBC didn't make the list this year but according to wikipedia they are on the 2004 list. So we have 4 in the area.

[Saulbadguy]

So which one will be the bitch and which one will be the butch?

[KC Jones]

So which one will be the bitch and which one will be the butch?

Sprint had 26Billion in revenue to Nextel's 10, so probably Sprint.

[StcChief]

Sounds like a good merger to me.
I have had Nextel for 3 years. Great coverage, Cust serv.

The phones are industructable. Really double cased Motorala's . Since Motorola invested heavy in the network.

The future Nextel network upgrade could be interesting for customers

Had Sprint before good luck there. Phones were iffy.

Verizon was a POS for coverage and service.

[HC_Chief]

115th & Metcalf = dead spot (that's an entrance to the campus, BTW)
College & Antioch = dead spot
College & Nall = dead spot

Phone = Sanyo SCP-5150

I worked there for two years... every person in my group had calls drop in the same area(s). Rumor has it former CEO Esrey had a relay installed in his attic because he couldn't get shit for coverage. 50% of the drive to Des Moines = analog roam.

Sprint's coverage network sucks. I'm switching as soon as my contract expires (probably T-Mobile or Cingular... friends with those report much better/wider coverage areas with less roaming & fewer drops)

Besides, Sprint is run by fuqtards.

[BigRedChief]

Sprint had 26Billion in revenue to Nextel's 10, so probably Sprint.

http://www.kansascity.com/images/kansascity/kansascitystar/news/SprintNextel.121004.cs.jpg

YeaH I don't see how Sprint can be anything but the big dog here in this deal.

[beavis]

Sprint is the engine that powers the KC economy. We are not just talking about 35k losing their jobs we are talking about the other jobs being lost where those 35 k spend their sprint money. All the local companies that supply sprint with the supplies it needs. Sprint leaving would devestate the KC economy.
Geez, a little dramatic are we? I think overestimate the influence one company has on a substantial metropolitan area. Besides, you are probably getting in a tizzy over nothing. I doubt there would be a ton of jobs lost over this. Sprint is the one doing the buying here.

[beavis]

2, and Sprint is one of them. KC will take a major step backwards once Sprint finally deals with their flailing business and has massive layoffs. I seriously doubt they leave the OP campus altogether though.

20k over the course of two years, almost 25% of their workforce isn't massive layoffs?

[HC_Chief]

lol, no doubt.

Sprint = big-name corporation that brings big bucks to Overland Park (KC Metro), but they aren't the only game in town... not by a long shot. Hell, I'd wager over half the IT pros in KC have worked for Sprint at one time or another.... and no longer work for them.

Sprint is a high-tech company run by myopic morons. If ever there were a 'top-heavy' corporation, Sprint is it.

[beavis]

Sprint is a high-tech company run by myopic morons. If ever there were a 'top-heavy' corporation, Sprint is it.
The people that are there now (I'm sure you know who I'm talking about) are just hatchet men. They aren't in it for the long haul. Just whack as many heads as possible without a glut of lawsuits, collect their golden parachute, and get the **** out.

[HC_Chief]

The people that are there now (I'm sure you know who I'm talking about) are just hatchet men. They aren't in it for the long haul. Just whack as many heads as possible without a glut of lawsuits, collect their golden parachute, and get the **** out.

Sure, and why not? Esrey embezzled how many millions? And then they gave him a HUGE multi-million dollar 'retirement package'?! :spock:

If it weren't for foresight in the 70s, that company would be long-dead by now. (foresight being the all-fiber network they installed, nation-wide)

[BigRedChief]

Geez, a little dramatic are we? I think overestimate the influence one company has on a substantial metropolitan area. Besides, you are probably getting in a tizzy over nothing. I doubt there would be a ton of jobs lost over this. Sprint is the one doing the buying here.

You have your opinion and the economist's in the KC area have another.

[beavis]

Sure, and why not? Esrey embezzled how many millions? And then they gave him a HUGE multi-million dollar 'retirement package'?! :spock:

If it weren't for foresight in the 70s, that company would be long-dead by now. (foresight being the all-fiber network they installed, nation-wide)
The life an executive must be rough. :rolleyes:

[beavis]

You have your opinion and the economist's in the KC area have another.
Economists also like to get their name in the paper.

[Soupnazi]

Neither one of these two companies will succeed until they both come to grips with the fact that they are commodities businesses.

[HC_Chief]

Neither one of these two companies will succeed until they both come to grips with the fact that they are commodities businesses.

Sprint <i>used</i> to be in the internet hosting business.... had some HUGE clients too: Ebay, Yahoo. Then Esrey bailed, Forsee came in and scrapped the division. Even though it was making money (PCS was hemmoraging money); AND it was ranked #2 overall after a mere 2 years in the sector (#1 in technical know-how/expertise). Forsee wants to make Sprint "the best darn telecommunications company in the market" (even though teleco is stagnating)

As the Guiness guys say, Brilliant!