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Sprint considers selling Nextel

Tue, 08/12/2008 - 8:20am
Brian Santo

Losing customers, losing money and unable to raise money through a stock offering, Sprint is considering selling off the Integrated Digital Enhanced Network (iDEN) that it picked up with the $35 billion acquisition of Nextel.

Alternatives for iDen include “improving operations, making additional investments, entering into strategic partnerships and considering potential divestitures,” according to a U.S. Securities and Exchange Commission (SEC) document, as quoted by Reuters.

There had been speculation that Sprint might spin Nextel off again, but the recently filed document is the first official notice that the option is definitely under consideration.

The iDEN network is based on technology developed by Motorola. It boasts certain operating efficiencies and walkie-talkie operation, but detractors point out that it has limited capacity. Sprint’s network had been beset by technological problems that the company says have long since been resolved.

The company has more than 14 million former Nextel customers still using the network, and about 1.7 million more who are subscribers of a combination of the Nextel iDEN network and the Sprint CDMA network (the company has more than 50 million subs total), but the integration is widely seen as fitful. Even at the time of the merger, Sprint had entertained the possibility of a gradual migration of all subscribers to its CDMA network.

Early last week, Sprint floated the idea of offering $3 billion in convertible shares, but withdrew the plan in the face of investor resistance that manifested as a rapid drop in the value of the company’s stock.

There are no potential buyers of the iDEN network who have identified themselves as such, though analysts expect there would be interested parties.

More Broadband Direct:

• CableLabs crowd picks chip from Silicon Image 

• EchoStar inks license agreement for CableLabs' tru2way 

• Verizon adds 23 new channels to Pittsburg-area lineup 

• Sprint considers selling Nextel 

• Cisco merges Linksys SMB program into Cisco Channel Partner Program 

• Digital transition may be a bust for cable 

• Arris tunes up demos for IBC 

• Broadband Briefs for 8/12/08 

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