Monday, October 15, 2012

After all this time, a suiter for Sprint

Well, it was bound to happen at some point...Sprint/Nextel is getting bought.  For at least the last ten years, there has been speculation that someone, anyone, is going to buy Sprint.  Most agree that their network and technology is excellent, and they have a somewhat strong customer base.  Sure, they took on a huge risk years ago with ION and blew $80B, taking on a large amount of debt and cementing them as the long-standing #3 Long Distance company in the US.  

Their next giant risk was shedding all profitable assets to "merge" with Nextel and become a pure-play wireless company. The trouble was that Nextel's network was that it is/was ideally suited to push-to-talk, a technology quickly waning in interest.  Worse, all devices on the network had to be manufactured by Motorola, a company unwilling to adjust it's handset lineup to include phones that could compete.  While Samsung and Palm were making the first sleek smartphones, Motorola was rolling out clunkers that finally included cameras.   

Never fully able to integrate these highly disparate networks, Sprint/Nextel now plunged further into debt and potential irrelevance.

During this time the stock was always buoyed by the possibility of a takeover. Now with the pending Merger of T-Mobile US (owned by Deutsche Telekom AG) with MetroPCS Communications, mergers like this one become far more likely.  

Sprint is saved, Japan gets another foothold in the US market.  The deal looks good for cunsumers and stockholders alike.  What could be bad? 

Softbank to buy Sprint/Nextel for about 20 Billion - Wall Street Journal

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