Sprint and Nextel announced their intention to merge today, forming a network embracing 35.4 million subscribers and reducing Americans national mobile network options to four: Cingular, Verizon, Sprint Nextel (“Sprextel”) and T-Mobile. After completing the merger in late 2005, the two companies would spin off Sprints local phone service to become all mobile, all the time.
By pairing up with Sprint, Nextel finds a way out of its current technology dead-end. Nextel phones run on iDEN (Integrated Digital Enhanced Network), which has no clear upgrade path to the high-speed data services, the likely future path for mobile phone companies. Nextels been testing out Flarions Flash-OFDM (a 10-word acronym) high-speed data system in North Carolina, but up until now the company said it wouldnt open up any kind of national high-speed network until the end of 2006 at the earliest – a full year behind Sprint, Verizon and Cingular.
As part of the merger, “Sprextel” promises to roll Nextels network over to CDMA (Code Division Multiple Access) with EVDO (Evolution/Data Only) high-speed data, the strategy being used by Sprint and Verizon. That technology offers a smooth path into the future, and its used by more people than iDen, so equipment is cheaper and more plentiful.
Sprint, meanwhile, gets Nextels spectrum. Nextel recently cut a deal with the federal government to trade some of its existing 800 Mhz spectrum for bands at 1.9 GHz, the same band Sprint uses. Sprint also gets Nextels customers – a proud, cultish bunch of business owners whove counted on Nextels legendary reliability and good customer service ever since the company was a dispatching network for truckers and taxicabs.
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