Executives from the wireless leaders now prepare for the unified company's introduction to some 40 million customers.
KANSAS CITY, Mo. — Sprint’s long awaited takeover of Nextel Communications was completed today, with executives from the wireless leaders now preparing for the unified company’s introduction to some 40 million customers.
It was the last formal step to the creation of Sprint Nextel Corp., the sum of a $35 billion deal pairing two companies with disparate strengths and customer bases that their backers say make them a perfect fit as the country’s third largest wireless provider.
“Communication is changing and we are not only ready for it, we will lead it,” said Timothy M. Donahue, the former Nextel president and CEO who is chairman of the new company.
It will be a number of weeks before consumers notice new signs going up at retail outlets, marketing aimed at exposing the new brand, additional service plans and handsets and other outward signs that the deal is sealed. All of this is being carefully rolled out in time for the crucial holiday shopping season.
Some will see signs of change sooner.
Investors traded shares of FON, which closed down 24 cents Friday at $26.38 and NXTL, down 64 cents to $33.85, for the last time, with the ticker symbol S to begin on Monday. Employees will receive instructions on how to get identification badges, stationary and business cards with the new company logo. And Donahue steps back as Sprint’s Gary D. Forsee emerges as president and CEO.
“Getting bigger is a large reason for doing this deal,” said Avi Greengart, an analyst with Sterling, Va.-based Current Analysis. “But in terms of these two companies matching, they matched their customer demographics very well.”
Overland Park, Kan.-based Sprint, whose campus now becomes the operational headquarters, is known for its focus on consumers and its emphasis on technology, from downloadable cell phone games to live television on your handset. Reston, Va.-based Nextel, whose suburban Washington base is the new corporate headquarters, is popular with businesses of all sizes and is the leader in push-to-talk technology that makes cell phones like walkie talkies.
As a joint company, the advances of both Sprint and Nextel will likely lead to new consumer offerings. One area Sprint Nextel wants to emerge as a leader is wireless broadband.
Using what’s known as 2.5-gigahertz spectrum to send a signal, wireless broadband would be a wider use of the technology that has brought wireless “hot spots” to airport terminals and coffee shops. It would make it possible to take a train trip coast-to-coast without disconnecting from the Internet.
“Imagine it being like Wi-Fi on steroids,” said Scott Stoffel, a Sprint spokesman. Stoffel says the unified company owns 2.5-gigahertz coverage for about 80 percent of the U.S.
Berge Ayvazian, chief research officer for the Yankee Group, said such offerings will be important from Sprint Nextel as well as the top two wireless companies, Cingular Wireless and Verizon Wireless. Ayvazian said the U.S. is reaching a cellular saturation point and wireless companies will need to offer new technology to expand their businesses.
“We need to now think of these handheld devices not just as phones but as communications, content and commerce devices,” the analyst said. “The way they participate in our lifestyle will change.”
The merger is not without its opponents. The new company is left to deal with a litany of disagreements with their affiliates, who claim Nextel’s addition will lead Sprint to violate agreements it made in the 1990s not to compete with its affiliates in their territories.
One of those companies, U.S. Unwired Inc., has been bought by Sprint for $1.3 billion. It has also reached agreements with two other companies, iPCS and UbiquiTel, and is negotiating with three others, Alamosa, Enterprise and Gulf Coast.
All those details will be put aside, at least briefly, as Sprint Nextel’s roughly 80,000 employees gather at locations across the U.S. on Monday to celebrate their new company. They’ll just be settling into new jobs under the reorganized corporate structure and will collect T-shirts and pens brandishing their new employer’s logo.