Verizon buying/not buying Sprint
By Peter Rojas 
posted Dec 15th 2004 12:15AM
posted Dec 15th 2004 12:15AM
So Verizon isn't putting in a bid for Sprint. At least not officially. Vodafone, which is partners with Verizon in Verizon Wireless, is now denying those reports that they had given their blessing to Verizon trying to buy Sprint. No one seems to exactly know whether Verizon is seriously thinking about making the big buy (and whether regulators would even approve so mega of a merger), or is just trying to psyche everybody out and scuttle the Sprint/Nextel merger (which is totally fine, we're not exactly too hot on the idea of those two getting hitched, either).
"......just trying to psyche everybody out and scuttle the Sprint/Nextel merger (which is totally fine, we’re not exactly too hot on the idea of those two getting hitched, either)."
I think perhaps for the near term it might not seem like a good idea, but in the long term it does...for both Sprint AND Nextel.
Currently, Nextel runs its services over iDen, a Time-Division Multiple Access (TDMA) network. This type of network is "running out of room" due to the fact that government agencies, private corporations, or the police for that matter, use that same frequency. Furthermore, it is more difficult for these services to be rolled out nationwide.
Sprint, on the other hand, uses the Code-Division Multiple Access protocol (CDMA). This wireless technology operates on a higher frequency, is more robust, and thus wont interfere with the aforementioned services.
Now, in the short term, it may not make sense for Nextel to merge with Sprint, probably because it would be difficult for users to switch handsets and, more importantly, it would be even more difficult for them to combine two non-interoperable networks. But, as it was mentioned before, Nextel is "running out of room" and desperately needs to move to a more open, widely available, robust technology.
Qualcomm (who patented CDMA after WWII) also happens to have the rights to Qchat, which is much like the Direct Connect technology Nextel uses (and the users LOVE IT). Only Qchat can operate over CDMA networks.
As for Sprint, they get some out of the long run as well. Due to the recent merger of Cinglar with ATTWS, we have a mega merger that actually outdid Verizon. Sprint buying Nextel, although the two combined now won't overcome Verizon or Cingular, puts them in an advantageous position...and that advantageous position is...drumroll...Nextel AND Sprint happen to have rights to the MMDS spectrum (2500+ mhz i believe). MMDS has been attempted before and now it could get another chance -
http://www.shorecliffcommunications.com/magazine/volume.asp?Vol=40&story=353
An advantage for both Verizon and Sprint would be the fact that they both use CDMA and combining networks would take less effort. However, Verizon buying Sprint toes the line of unfair competition.
So whats it gonna be? Its either eat or be eaten for Sprint...and oh boy are Nextel subscribers pissed!
THanks for that great info! I'm a Nextel customer and wondered what the merger might mean for me. I hate to display my ignorance but can you explain why I should be pissed? That's not a sarcastic question either. I'd like to know what I, a nextel customer, can expect to happen as a result of the merger. Thanks.
Well, for one, a lot of people just plain hate Sprint...whether its the quality of their voice services, the quality of their customer support, etc. But i can only guess as to what can happen if this merger even happens in the first place.
First and foremost, the customers have to be somewhat satisfied. Not all will be, but some will leave and take their business elsewhere.
The logical way would be that current Nextel subscribers can still enjoy their service untethered for a while, but will be asked to eventually switch to a Sprint device (which should hopefully have all the functions of the Nextel handsets).
What happens to Motorola in all of this is uncertain since Motorola is the company that developed the iDen Direct Connect technology in ALL of Nextel's handsets. I know Sprint carried Motorola phones in the past and still carry them today, but not exclusively (infact i think they currently only offer one or two devices).