Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 9 pages
Data source: Published sources
Topics:
Sprint Corporation; Nextel Communications Inc; US wireless telecom industry; Largest wireless operator; Merger of equals; Average revenue per user; Code division multiple access (CDMA) technology; Integrated digital enhanced network (iDEN); Push-to-talk technology; Third generation (3G) communications technology; Fourth generation (4G) communications technology; Evolution-data only (EVDO) network; Customer loyalty; Competitive strategies; Merger synergies and challenges
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Abstract
Sprint Corporation and Nextel Communication, the third largest and fifth largest wireless operators respectively in the US, announced the merger of their operations in December 2004. The merger results in the formation of a new company called Sprint Nextel thus creating the third largest wireless operator in the US. The US$36 billion merger to be finalised by mid-2005, is expected to provide synergies such as an enhanced customer base of 35.4 million, cost savings of US$12 billion, and stronger market position. Post-merger, the company would have a large spectrum holding to make a head start in the advanced 4G technology area moving ahead of its competitors. Meanwhile, to make the merger a success the new company has to deal with challenges posed by incompatible technologies, cultural differences, and initial high integration costs. The case study provides the scope to discuss the potential synergies, opportunities and challenges arising out of the merger for the new combined entity.
About
Abstract
Sprint Corporation and Nextel Communication, the third largest and fifth largest wireless operators respectively in the US, announced the merger of their operations in December 2004. The merger results in the formation of a new company called Sprint Nextel thus creating the third largest wireless operator in the US. The US$36 billion merger to be finalised by mid-2005, is expected to provide synergies such as an enhanced customer base of 35.4 million, cost savings of US$12 billion, and stronger market position. Post-merger, the company would have a large spectrum holding to make a head start in the advanced 4G technology area moving ahead of its competitors. Meanwhile, to make the merger a success the new company has to deal with challenges posed by incompatible technologies, cultural differences, and initial high integration costs. The case study provides the scope to discuss the potential synergies, opportunities and challenges arising out of the merger for the new combined entity.