Tired with four years of straight losses, Sprint Nextel Corporation (NYSE:S). announced today to end the services for its Nextel walkie-talkie phones on June 30, 2013. Though the company had earlier stated about shutting down the Nextel network, it hadn’t set a date.
Sprint acquired Nextel in 2005, but it could not run the two incompatible wireless networks successfully and suffered huge losses ever since the acquisition. Today there are about 5.5 million phones running on Nextel network. Most of the Nextel users are government agencies and businesses that issues phones to their workers.
Corsair Capital was down by about 3.5% net for the third quarter, bringing its year-to-date return to 13.3% net. Corsair Select lost 9.1% net, bringing its year-to-date performance to 15.3% net. The HFRI – EHI was down 0.5% for the third quarter but is up 11.5% year to date, while the S&P 500 returned 0.6% Read More
Now Sprint has a big challenge of convincing the existing Nextel users to switch to Sprint network instead of going to a competitor. The company management is preparing its pitch and adding a “push-to-talk” feature in Sprint phones to lure the customers.
According to the sources, another reason behind shutting down Nextel is to free up space for the new fourth-generation data network. Nextel network has 2G technology with low data speeds. So it is not suitable for smartphones.
In a separate report, a Sprint spokesperson said that the company has received $1 billion credit line from a syndicate of Banks to build up the new network. Germany-based Deutsche Bank is the major lender in the deal which is also backed by Swedish government. The export credit fund of Sweden backed the project because a Swedish telecom company Ericsson AB is main vendor for the network.
Earlier Sprint had said that it may fetch over $3 billion in vendor financing from Alcatel-Lucent, Samsung and Ericsson. The Sprint shares remained unchanged today at $2.62.