Sprint Nextel: iPCS situation will not harm iDEN customers
Sprint Nextel’s legal dispute with iPCS Wireless should not be problematic for the carrier’s iDEN customers, a spokesman with the nationwide carrier said, despite a recent court ruling that requires Sprint Nextel to cease owning its iDEN network in territories where iPCS operates.
When Sprint merged with Nextel Communications, iPCS was one of several Sprint affiliate partners that claimed the merger was a violation of Sprint’s affiliate agreements, which granted the affiliates exclusivity of the Sprint brand within their territories. With the Sprint-Nextel merger, the affiliates would be competing against another offering—services operating on the former Nextel iDEN network—within their territories.
Sprint Nextel eventually was able to reach agreements with all of its affiliates except iPCS, which boasts almost 700,000 subscribers in 81 markets in Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. Earlier this year, an Illinois circuit court ruled that Sprint Nextel must cease owning the iDEN network in these territories by Jan. 25, 2010.
But Sprint Nextel CEO Dan Hesse said he does not believe the litigation will create problems for the nationwide carrier’s iDEN customers.
“It’s business as usual for our customers there, and we’re taking all of the actions,” Hesse said during the company’s fourth-quarter conference call last month. “There are alternatives with respect to complying with what happens in the courts.”
Sprint Nextel spokesman Matt Sullivan declined to comment on what alternatives the carrier may be considering, but he echoed Hesse’s sentiment that iDEN customers should not be concerned that they will be without service in less than 11 months.
“The message that we’re trying to get out there as much as possible is that customers don’t need to take any action at this time,” Sullivan said. “We are not shutting down the iDEN network and have no plans to shut down the iDEN network. We have a plan that we’re implementing to address the court’s ruling.
“We’re committed to our customers, and we’re going to make sure they’re taken care of.”
Theoretically, Sprint Nextel could divest its iDEN assets in the iPCS territories to comply with the court ruling, but doing so could decrease the value of the rest of the iDEN network, said mobile wireless consultant Andrew Seybold. Moreover, finding a company interested in owning and operating just a portion of the nationwide network operating on iDEN—a technology supported by only one vendor, Motorola—would be difficult, especially in the current economic downturn, he said.
“Standalone networks today—especially with a technology like iDEN—make very little sense,” Seybold said during an interview with Urgent Communications. Seybold also said he does not expect any buyers for the iDEN network to emerge until after the 800 MHz rebanding effort is completed.
Another option for Sprint Nextel would be to buy out iPCS. However, the nationwide carrier would appear to have little leverage in such negotiations with the court-ordered deadline of Jan. 25, 2010, looming, Seybold said.
“[Sprint Nextel officials are] getting backed into a corner,” he said. “I have no idea what they’re thinking or what they’re planning to do, but they’ve got to do something, because they’re getting hammered from a lot of different sides.”
