Sprint and Nextel have formally closed the merger they announced in Decembe, becoming mobile behemoth Sprint Nextel Corp.
The new company has about 44 million subscribers and will be heaquartered at Nextel's home of Reston, Virginia, with its operational base in Overland Park, Kansas - Sprint's home base. Shares in Sprint Nextel, with the ticker symbol S, will begin trading on the New York Stock Exchange later today.
The "merger of equals" was the second big deal in the consolidation of the US mobile market over the past two years. Cingular Wireless' acquisition of AT&T Wireless Services closed last October. There are now four major national mobile operators in the US, led in subscriber numbers by Cingular, which claims more than 50 million subscribers, followed by Verizon Wireless with 45.5 million. Sprint Nextel will therefore become third largest. The remaining provider, T-Mobile, has about 18.2 million subscribers and has been seen by some as a potential takeover target.
Sprint Nextel will use the Sprint corporate brand, but there will be a line of Nextel products sold in Sprint stores. The company initially will operate two different types of wireless networks, Sprint's CDMA (Code Division Multiple Access) infrastructure and Nextel's iDEN (Integrated Digital Enhanced Network) system. The combined company will continue to invest in and expand its iDEN network through 2007 and is looking at opportunities to market it to governments and public safety organisations, a Nextel exec said.
Nextel pioneered instant "push-to-talk" services, which became a big hit with businesses and government agencies and are now offered by many other mobile operators using different technologies. Nextel has a loyal and lucrative customer base of small enterprises and blue-collar business units, as well as a youth-oriented service called Boost Mobile, while Sprint brings consumer and large enterprise accounts.
Former Sprint CEO Gary Forsee is head of the combined company, and Tim Donahue, former CEO at Nextel, will become executive chairman.