Wednesday, March 05, 2008

RUMOUR MILL: Sprint Nextel Corp (NYSE:S)

A curious rumour surfaced today couple of hours before the close saying Sprint Nextel Corp (NYSE:S) has hired Morgan Stanley and initiated director Ralph V. Whitworth's plan to spin-off Nextel. According to the rumour it could and must be viewed as huge positive for S. Spin-off announcement 'expected' in 2-4 weeks.

Considering Sprint Nextel (NYSE:S) has been subject to various chatter (both pos & neg), I wanted to highlight some very insightful feedback from a NCN member.

He notes:

Both iDEN and CDMA subscriber losses have been huge... this was a stupid deal in the first place and unwinding Nextel now at a depressed price makes no sense. I think they should hold on until the market condition improves and the company shows solid subscriber growth.Not sure if this is a concession that the Q-chat feature on Rev-A (QCOM product) is not viable technologically. Either way, this is not going to solve CDMA business of Sprint at all. Sprint should have just spend billions on improving coverage like VZW did in the late 1990s/early 2000s. It's paying huge dividend. Sprint is scr*w*d for sure.

Notablecalls: Couldn't agree more.

1 comment:

Dan said...

While it may not be an opportune time to unload Nextel given its decline in valuation, I think Sprint's play at WiMax could bode well for its future in wireless. It may be a good idea for the company to refocus its efforts and allow Nextel to go off and do its own thing.