Remember back in the day, when the “bleep, bleep” of a Nextel phone was a sign of coolness? Then soon thereafter they became extremely annoying when the person on the other end of the two-way radio would continuously ramble on, and on, and on? Well, this week, Sprint announced their plans to begin phasing out it’s Nextel Network in 2013. This decision will lift the burden of having to operate incompatible services for the struggling carrier.
Sprint acquired Nextel in 2005 for $35 billion and is expected to save more than $11 billion over the next seven years as a result of the restructuring. Nextel runs on the iDEN standard that was once touted as the next best thing in cellular technology. The problem that Sprint has been facing is they have been attempting to manage three incompatible networks-WiMax, their latest and greatest providing service for it’s 4G service which is operated by Clearwire, their traditional CDMA 3G network and Nextel’s antiquated iDEN infrastructure. This business structure ties up a lot of capital. as well as human resources. which spreads the entire company very thin.
Since the merger in 2005, Sprint has been losing massive amounts of customers stemming from poor service, mostly due to the failed integration of the Nextel portion of the business. Sprint has slowly been changing their image, but it seems not fast enough to save the dying iDEN technology.
This past summer, Bloomberg ranked the Sprint-Nextel merger as one of the worst mergers of the last five years, and, honestly, you could probably rank it in the top ten all time. In the last five years Sprint has lost hundreds of thousands of subscribers, and has experienced a 47 percent drop in their stock price.
I’m not a Sprint customer, and at this point I don’t think I would consider their service, yet I hope they get this ship moving in the right direction as all cellular customers benefit from increased competition.
Have you ever had Nextel service and if so what was your experience? Will you miss the constant “bleep, bleep” we all used to hear around town?