Telecom Lead America: Sprint said it will shut down the
Nextel network as early as June 30, 2013. Sprint is scrapping the Nextel
network to make room on the airwaves for a new 4G data network.
The Nextel network runs in 2G technology with low data
speeds that are unsuitable for smartphones, making it difficult for the
combined company to optimize its wireless infrastructure assets.
Sprint bought the Nextel network in 2005 for $36 billion.
Sprint has been losing for the last four years as it’s struggled with the cost
of running two incompatible wireless networks.
Nextel’s push-to-talk technology grew less popular over
the years, and customers have been fleeing the network in droves. There
were 5.4 million phones active on the Nextel network at the end of March.
The carrier now transitioning Nextel subscribers the
Sprint network and has added phones with a walkie-talkie-like “push-to-talk”
feature as part of the pitch.
Last quarter, Nextel lost 455,000 contracted customers,
and only 228,000 rejoined the Sprint-branded service.
Sprint wrote down $543 million of Nextel’s value last
quarter. That’s just another drop in the bucket compared to the $29.7 billion
writedown it took on the Nextel brand in 2008. Virtually all of the the
merger’s value has now been written off.
Sprint to buy Ericsson gear, arranges $1 billion credit with
Deutsche Bank
Sprint said that it’s been approved for a $1 billion line
of credit to build out the new 4G network.
For the credit facility, Sprint entered the credit
agreement with Deutsche Bank and a syndicate of other banks which expires in
March 2017.
Sprint will launch LTE in six major cities in the first
half of this year.
Recently, Sprint Nextel posted 5 percent increase in
revenue at $8.7 billion in the first quarter of 2012 against $8.3 billion in Q1
2011.
editor@telecomlead.com
