January 10, 2005

By Johna Till Johnson, President, Nemertes Research

Recent and rumored merger and IPO activity among wireless providers highlights the growing importance of wireless communications services. In December, Sprint Corp. (NYSE: FON) announced merger plans with Nextel (NASDAQ: NXTL), creating a $70-billion company to be called Sprint Nextel that’s squarely in the No. 3 spot following Cingular, itself a joint venture between SBC Communications (NYSE: SBC) and BellSouth (NYSE: BLS), and Verizon (NYSE:VZ).

Technical and business integration challenges remain, most significantly the need to migrate Nextel’s network from its current i-DEN technology to Sprint’s CDMA without compromising customer satisfaction or such services as push-to-talk (which works more efficiently over i-DEN). Additionally, integrating billing and administration of the combined company’s 35 million subscribers will be a formidable task.

Separately, Sprint Corp. and Virgin Group are reportedly considering taking their joint venture, Virgin Mobile USA LLC, public. Finally, Alltel (NYSE: AT), is rumored to be purchasing rural telco Western Wireless (NASDAQ: WWCA) for $4 billion.

The complete Impact Analysis is available to Nemertes clients. For more information, please contact Chris Zimmerman at christine@nemertes.com