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The transaction was all-cash and was estimated at approximately $4.3 billion, including the assumption of approximately $900 million of net debt. Before acquiring Alamosa, Sprint Nextel Corporation was involved in some litigation issue with one of Alamosa Holdings' subsidiaries, AirGate PCS Inc. Therefore, completing the Alamosa acquisition brought final resolution in this matter. Alamosa was one of Sprint's most important affiliates before the merger with Nextel and the acquisition of this wireless affiliate. Texas based Alamosa Holdings provides Sprint PCS services in 19 states across the United States, and it has about 1.5 million direct wireless subscribers. The affiliate has approximately 1,300 employees. In 2005, Alamosa Holdings' revenues reached $1.32 billion. The most important outcome of acquiring Alamosa Holdings was the fact that the acquisition extended Sprint Nextel Corporation's direct service territory to an additional 20 million people in 19 states.
Another wireless affiliate that was acquired by Sprint Nextel is Enterprise Communications Partnership. The acquisition was completed in December 2005 but it was officially made public in January 2006. Enterprise Communications Partnership was also a PCS affiliate before the acquisition. This acquisition was estimated at approximately $98 million, which included the assumption of debt (Sprint Nextel, 2006). Sprint Nextel was also in litigation with Enterprise Communications Partnership before the acquisition, which terminated the litigation matter, exactly like in Alamosa Holdings' case discussed above. Columbus-based Enterprise Communications Partnership activates on the PCS services market in Georgia and Alabama. The company has approximately 80 employees. Enterprise Communications' revenues in 2005 reached approximately $54.3 million. For Sprint Nextel, the most important outcome from acquiring Enterprise Communications Partnership was gaining about 52,000 direct wireless subscribers, and expanding its direct service territory to cover an additional 825,000 people.
Sprint Nextel Corporation made another affiliate acquisition in the beginning of 2006. This time, the corporation completed the acquisition of Velocita Wireless. After the acquisition, Velocita Wireless was intended to activate as a Sprint Nextel subsidiary using some of the company's 900 MHz spectrum to supplement Sprint Nextel's capacity and coverage for the company's iDEN-based Nextel National Network (Sprint Nextel, 2006). This acquisition was welcomed both by Sprint Nextel and Velocita Wireless officials.
The acquisitions process did not stop here. In June 2006 Sprint Nextel Corporation officially announced that the company had completed the acquisition of Nextel Partners. This acquisition was estimated at approximately $6.5 billion. This amount of money represented $28.50 per share of Nextel Partners Class a Common Stock (Sprint Nextel, 2006). Before this acquisition Sprint Nextel owned about 31% of Nextel Partners common stock. The most important outcome for Sprint Nextel Corporation was the fact that after this acquisition the company started to control licensed wireless spectrum in 58 additional markets. Also, after the acquisition, Sprint Nextel reached approximately 54 million additional people in mid-sized and rural markets in 31 states. After this acquisition, Sprint Nextel was estimated to have approximately 51 million wireless subscribers. The Sprint Nextel Corporation President was in complete favor of this acquisition, as he stated that: "the acquisition of Nextel Partners marks another important milestone as Sprint Nextel executes our vision of converging our unique wireless and Internet wireline assets to create an entirely new suite of mobility and IP-based products and services for our customers. With this acquisition, and the expanded Nextel iDEN network footprint, we will be able to offer customers in Nextel Partners' territories the full range of products and services more quickly and efficiently, and we will benefit from managing this part of our business under a consolidated organization and cost structure" (Sprint Nextel, 2006). The acquisition of Nextel Partners by Sprint Nextel Corporation was intended to make no difference for the former Nextel Partners' clients, as all existing sales and customer service channels will not be modified. However, former Nextel Partners' subscribers and support functions will be gradually integrated into the company's existing operations. The Federal Communications Commission (FCC) approved the purchase and transfer of over 6,000 licenses in June 2006. Also, this transaction received all the necessary approval from any organisms involved.
Another wireless affiliated was acquired in July 2006. This time, Sprint Nextel Corporation acquired UbiquiTel Inc. The acquisition was a complete success. The transaction was all-cash and was estimated at approximately $1.3 billion, which included the assumption of about $300 million of net debt. In this case also there were litigation issues between Sprint Nextel and UbiquiTel Inc. Like in the above mentioned acquisition cases, this acquisition also brought final resolution to these litigation issues. The Conshohocken-based UbiquiTel Inc. was intended to provide print PCS services in mid-sized markets located in California, Idaho, Indiana, Kentucky, Nevada, Tennessee, Utah, Washington and Wyoming, covering 8.3 million people (Sprint Nextel, 2006). UbiquiTel Inc. has approximately 425 employees and in 2005 the company's revenues reached $422.7 million. The most important outcomes that this acquisition brought for Sprint Nextel Corporation were the fact that Sprint Nextel gained approximately 452,000 PCS wireless users to become direct subscribers of Sprint Nextel, 151,000 wholesale subscribers, and the company's direct service territory was extended to an additional 8.3 million people in 9 states.
Current state of the company
Currently, Sprint Nextel Corporation is one of the most important telecommunications companies in the world. The company has now reached an impressive number of approximately 53.7 million subscribers. Also, Sprint Nextel is the proud operator of the third largest wireless telecommunications network in the United States. The first places are taken by Verizon Wireless and at & T, which are Sprint Nextel's most important competitors currently. These competitors determined Sprint Nextel to change its marketing strategy and customer relationship approach, in order to face such tough competition. Basically, Sprint Nextel Corporation currently provides cellular phone services, and landline, long distance, and business telecommunications. Also, Sprint Nextel now provides pre-paid services due to its Boost Mobile brand, and it provides this kind of services also in the Philippines through its Next Mobile brand.
Also, Sprint Nextel is a worldwide Tier 1 Internet carrier and makes up a portion of the Internet backbone (Wikipedia, 2007). The company's success is also proven by the fact that Sprint Nextel is the operator of the largest wireless broadband network in the United States and is the third largest long distance provider.
Sprint Nextel's executive headquarters are located in Reston, Virginia, but the company's operational and engineering headquarters are located in Overland Park, Kansas. The Kansas headquarters engage the largest number of Sprint Nextel's employees. Although when the merger took place the two former companies, Sprint and Nextel, were considered to be equals, Sprint had much more power over Nextel, therefore this merger can be considered an acquisition under certain circumstances. As a consequence, although the newly formed corporation is officially named Sprint Nextel Corporation, it is shortly referred to as Sprint, both on internal level and international one.
Sprint Nextel's activity is very diverse, as the company offers a "comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering, and deploying innovative technologies, including two robust wireless networks serving 53.6 million customers at the end of the first quarter 2007" (Sprint Nextel, 2007).
In order to face the though competition on the communications market, Sprint Nextel completed several strategic alliances. The most important alliances were completed with Cisco, IBM, Microsoft, Northrop Grumman, HP, EDS, Lucent, Nortel, and Unisys. Sprint Nextel divides these strategic alliances into two categories: platinum alliances, and gold alliances (Sprint Nextel, 2007). For Sprint Nextel, platinum alliances are considered to be the following:
Cisco: together with Cisco, Sprint Nextel offers differentiated IP/MPLS, Managed IP Telephony, Managed Network and Security services that enable the convergence of voice, video, and data
IBM: the alliance between the two companies was intended to integrate Sprint Nextel's extensive network capabilities with IBM's software assets and business process knowledge that are unique for the moment in order to provide custom solutions that enable real-time applications. Such a custom solution is Sprint Business Mobility Framework
Microsoft: the alliance between these two companies consists in offering business and consumer applications delivered via Sprint's wireless services. The two companies together also provide solutions that ensure network security and reliability
Northrop Grumman: the purpose of the alliance between the two companies was that of providing both private and public secure networks and other joint solutions also that are able to meet the needs and requirements of Federal Government, State Government, and also Local Government
HP: Sprint Nextel Corporation and HP developed joint technology through which the two companies will introduce industry-leading mobility solutions that include embedded technology that may extend the workplace
For Sprint Nextel, the gold alliances are considered to be the following:
EDS: the alliance between Sprint Nextel and EDS is supposed to leverage Sprint Nextel's leading-edge network and integrated communication services combined with EDS's managed services and business process capabilities that have not been matched yet by any competitor on the market
Lucent: the two companies have joined forces…[continue]
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