Sprint Renews Commitment to Nextel Network
Sprint Nextel has recommitted itself to its Nextel business, which the struggling third-place U.S. mobile operator reportedly had considered selling off.
When it merged with Nextel in 2005, Sprint acquired that carrier's iDEN network, which is based on proprietary technology without a direct path to 3G (third-generation) data capability. The iDEN network has been shedding subscribers even faster than Sprint's own network, adding to the company's financial woes. Sprint had been looking for buyers for the asset, according to numerous reports over the past year. But late Thursday, it appeared to have ended that quest.
"After careful review of the iDEN business, Sprint intends to retain and rejuvenate this important asset," the company said in a press release. The carrier's longtime partnership with Motorola, the primary equipment provider for iDEN, has also been extended. In partnership with Motorola, Sprint will launch 10 new handsets and deliver enhanced network and infrastructure support, including software upgrades, the company said.
Sprint will launch the Motorola i576 handset on Sunday and later this year will introduce the BlackBerry Curve 8350i for the iDEN network. It will also roll out eight more iDEN handsets next year, with five coming in the first half.
At the time of the 2005 merger, Sprint said it would cap off investment in iDEN after the end of 2007. But that year, the company said it would keep investing in it until at least 2012. After a shakeup at the carrier last year, in which Dan Hesse came on board as CEO, there were reports he would sell off Nextel. Sprint answered those reports by saying in January that it would put more money into iDEN and introduce some new handsets. But reports of a possible sell-off continued.
Meanwhile, Motorola has been going through its own struggles and plans to spin off its ailing handset business in 2010. On Thursday, the company said it would focus exclusively on Microsoft Windows Mobile and Google's Android platform as operating systems for its phones.
On Thursday, Hesse described iDEN as a key differentiator for Sprint, pointing to Nextel Direct Connect, the pioneer of "push-to-talk" systems, which turns cell phones into walkie-talkies. Sprint has extended the Direct Connect feature to some of its own CDMA (Code-Division Multiple Access) phones.
Sprint also plans to push its Boost Mobile prepaid service, which is offered on the iDEN network, introducing a lower per-minute rate and other pricing options. Early next year it will offer Boost Unlimited for iDEN, with a nationwide home calling area for one monthly fee.