iDen on the auction block
Last modified on Monday, 11 August 2008 07:38
Sprint-Nextel Corporation is said to be contemplating selling off the iDen network, the Nextel wireless network it purchased in 2005. However, it may have difficulty selling it, as its value has dropped to about $5 billion, a nearly 80 percent decline.
The iDen network is used by public safety and construction workers and Sprint has had difficulty integrating it with its own services. Now that it has been integrated, however, it would likely be difficult for any purchaser to reverse the integration that has been completed with Sprint-Nextel, which includes a walkie-talkie feature, billing, broadcast towers and customer service. Sprint paid nearly $35 billion for Nextel Communications three years ago, and has lost millions of customers and revenue since then.
Sprint is currently under considerable pressure from the FCC to give up a key portion of its iDen wireless airwaves for a national emergency communications networks. Rumors have been circulating that NII Holdings Inc., a Latin American service provider that uses iDen’s technology, might be interested in acquiring the iDen network.
Sprint has been losing money in a large way and analysts were predicting that Sprint would shed whatever businesses it could sell. Sprint ended its second quarter with $23 billion in debt, and cash and marketable securities of $3.5 billion. In Sprint’s fourth quarter, Sprint took a $29.7 billion write-off for most of the value of Nextel.