The merger of Sprint and Nextel Communications won approval from the Federal Communications Commission and the Justice Department yesterday...
WASHINGTON — The merger of Sprint and Nextel Communications won approval from the Federal Communications Commission and the Justice Department yesterday, clearing the way for a combined company with more than 35 million mobile-phone subscribers.
The companies said they expect the $35 billion merger to close within two weeks and joint operations to begin within two months, meaning consumers may see joint advertising on television and new signs in stores by October.
The combined Sprint Nextel will be the nation’s third-largest mobile company and will have more ammunition to compete against its much bigger rivals, Cingular Wireless and Verizon Wireless, and to forge potentially lucrative partnerships with cable companies.
The company will continue to market to Sprint’s customer base and to Nextel’s loyal business clients, who are devoted to its “push to talk” walkie-talkie-like feature.
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For now, the companies will still operate two different network technologies, so that customers will not have to switch their phones. They hope to develop a new version of Nextel’s push-to-talk service that will operate over Sprint’s network, allowing current Nextel customers to use the feature with Sprint customers.
The FCC said the merger would “serve the public interest, convenience and necessity, and that the likely public-interest benefits of the merger outweigh any potential public-interest harms.”
But FCC Commissioner Michael Copps signaled some skepticism because of the flurry of mergers in the last year that have reduced the number of major U.S. mobile phone companies from six to four: Cingular Wireless, Verizon Wireless, Sprint Nextel and Bellevue-based T-Mobile.
The Justice Department, which did an antitrust review, said in a separate statement that it saw no reason to challenge the merger, saying consumers “will continue to have a number of other carriers from which to choose.”
The companies argue that consumers will see benefits in the form of new services, such as faster networks that allow reliable Internet surfing over mobile devices.
The FCC’s only significant concern was resolved when Sprint and Nextel promised to use some of their high-frequency spectrum to offer such services to 30 million people within six years.
The companies sought swift regulatory approval in the hopes of being able to launch a full marketing campaign for Christmas. They have unveiled a new corporate symbol, a yellow-and-black “Sprint” logo.
When the merger is completed, Kirkland-based Nextel Partners will have five days to notify shareholders of the sale. Those shareholders will then have the right to call for a vote to decide whether they want to be purchased by the newly formed Sprint as a condition of its joint-venture agreement with Nextel Communications.
Nextel Partners provides Nextel-branded services in smaller markets.
Information on Nextel Partners provided by Seattle Times business reporter Tricia Duryee.