Daily News: Sprint-Nextel merger was approves by FCC

By Luis Galarza, Telecommunication Advisor.

Cell Phone News US -- August 2005-FCC approves Sprint-Nextel merger(C)1994-2005 M2 COMMUNICATIONS LTD http://www.m2.com

The US Federal Communications Commission (FCC) and the US Justice Department have approved the USD35bn acquisition of Nextel Communications Inc by Sprint Corp, a US wireless company, following shareholder approval last month.

The newly merged Sprint Nextel Corp is expected to spin off Sprint's local telephone service at the beginning of 2006, forming the USA's fifth biggest local telecommunications company with 7.6m access lines across 18 states. According to the FCC the benefits of wireless competition, such as improved coverage and lower prices, will continue after the deal and improvements in service quality and services offered are anticipated.

Sprint is to gain access to Nextel's 15.3m customers, including many business subscribers, as a result of the merger while Nextel is said to avoid an upgrade of its own network. Some job cuts are anticipated. The merged company is reported to have USD40bn in annual revenue and over 40m wireless customers and it has apparently agreed to offer wireless broadband services to around 30m people in large and small markets.

Consumer advocates are said to be concerned that the merger will only leave three main players in the market though it is felt that the merged company will be in a stronger position to compete against market leaders Cingular Wireless and Verizon Wireless. It is understood that antitrust investigators felt the merger would not give the companies market power in areas in which they compete and that customers would still have a choice of other wireless carriers.



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