Sprint-Nextel Corp. on Thursday laid to rest rumors that stretch back more than a year, saying once and for all that it will NOT be selling its push-to-talk iDEN network, which it acquired in what’s become known as “The Deal from Hell,” its 2005 purchase of Nextel.
The news comes just scant weeks since CEO Dan Hesse confirmed Oct. 8 that Sprint had a number of interested parties for Nextel and the accompanying iDEN network. It’s been considered on the block for awhile and no wonder: the difficult integration of Nextel, which it picked up for the then-shocking sum of $36 billion, led to a $29.5 billion write-down for the fourth-quarter 2007, reported in February of this year. Put in perspective, Sprint lost more money than the company is worth that quarter.
Overall, the fallout of the acquisition essentially created a financial storm for the carrier, which led to the ouster of then-CEO Gary Forsee, an ongoing hemorrhaging of customers and profit, the planned spinoff of its WiMAX operations to form a joint venture with Clearwire Corp., a refocusing on core competencies (read: CDMA) and lowering-expectations-type statements from Hesse to the effect that it will take many moons for the No. 3 carrier to right its ship.
But. This evening Sprint issued a statement that it is continuing its commitment to Nextel and iDEN: “After careful review of the iDEN business, Sprint intends to retain and rejuvenate this important asset. As part of that commitment, Sprint and Motorola have extended their long-term partnership to provide enhanced network and infrastructure support, including software upgrades, and to provide the best products and services to customers.”
That’s good news too for its prepaid MVNO, Boost Mobile, which rides on the Nextel network. The Sprint statement noted that it will be “refocusing” Boost with a lower per-minute fee and the launch of Boost Unlimited in 2009, which will offer a nationwide home calling area for one monthly fee.
In support of the decision the carrier also announced plans to launch new devices, including the Motorola i576 and the BlackBerry Curve, and eight new Nextel Direct Connect handsets.
This all might be a preview for some positive news out of the carrier: Sprint is due to report its third-quarter financials on Nov. 4. If they decided to keep Nextel and iDEN, something must be going right there. [Insert safe harbor statement here.]