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Next Generation Perspective Vol. 1, Issue 13Product Type: Market Research ReportPublished by: Pyramid Research Published: April 2007 Product Code: R8-565 Description EVENT SPOTLIGHTIn 2006, Sprint’s stock price slumped as a result of disappointing subscriber figures. This drop stemmed partly from a capacity overload on Nextel’s iDEN network, leading to increased churn and a lack of new additions to its desired market base—creditworthy postpaid subscribers. In addition, more disappointment ensued at the end of March 2007 as the company lost the right to compete with AT&T, Verizon, and Qwest for lucrative government contracts. Nevertheless, Sprint hopes the strategy of sacrificing short-term top-line growth for a better customer mix while deploying the most innovative technologies will better position the company in the medium term. This comes at a time when rumors surround the acquisition of Alltel, the fifth-place wireless company in terms of market share, with perhaps the best coverage in remote areas. We believe the acquisition of Alltel would make Sprint the US market share leader, with a more complete footprint across the US. Table of Contents Sprint’s wholesale and prepaid businesses are growing faster than its postpaid business.Deploying both EV-DO Rev. A and mobile WiMAX and then migrating iDEN customers to those networks should prepare the company for the expected increase in mobile data traffic. Data could be offloaded to the mobile WiMAX network to reduce traffic on Sprint’s Rev. A network, in turn increasing voice service reliability. Acquiring Alltel would position Sprint as the US carrier with arguably the greatest market share and an extensive network footprint reaching most of the US population. |
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