What's Next for Sprint Nextel? (UnStrung)
Amidst lackluster quarterly results, speculation surrounds a potential buyout of the No. 3 US cellular service provider Sprint-Nextel. In August 2005, following the Sprint-Nextel merger, many predicted the company would be one of the first to usher in a new "fourth-generation" network. More than a year later, specialists feel the company suffers from an identity crisis which contributes to its stagnant growth. Sprint-Nextel possibly offers too much for too many, and lacks a core customer base to recruit.
The Sprint-Nextel merger may not live up to expectations, its low stock price a liability, now 25 percent below its January 2006 price. Its weak stock is an attractive opportunity for rival wireless service providers and major cable companies to make a buy-out of the company. The technology that operates the Sprint-Nextel network (CDMA) conflicts with T-Mobile's network technology (GSM), but T-Mobile's parent company is eager to expand in the US and may initiate yet another Sprint-Nextel merger.