Sprint says farewell to Nextel iDEN network
Recently, the wireless industry lost a key player. No, it was not a person; it was the iDEN network owned by Sprint, which purchased the system from Nextel Communications in 2005. On June 30, Sprint shut down the iDEN network, marking the end to one of the most remarkable stories in wireless.
The network shutdown was not a surprise by any means. Sprint had been talking about ending the iDEN network for years, publicly announced it was shutting down the network in mid-2013, and had turned off individual sites for some time. But the realization that the iDEN network actually was shut down was observed by many in a remarkably human manner, according to Morgan O’Brien, co-founder of Nextel Communications.
“I went to one of apparently several iDEN wakes last night,” O’Brien said. “It was great. It was not sad. It was very joyous. … There was a sense that it had had a good life cycle and some regrets, but we understand.”
Attended by more than 100 people, the iDEN wake that O’Brien spoke of included many former Nextel employees, some of who still work for Sprint. One engineer covered two tables with the various iDEN phones that had been developed over the years.
“It was amazing to see the transformation, as it went from the oversized handset of the first days to the smallest, sleekest guys that we have,” O’Brien said. “Obviously, it was a product that many people loved. We assembled such a good team to sell it and nurture it.”
Indeed, when Sprint bought Nextel, Nextel Communications was one of the more remarkable success stories. Started as FleetCall in 1987, the company changed its name to Nextel Communications in 1993. Instead of buying spectrum at auction, the company patched together frequencies it purchased in the specialized-mobile-radio (SMR) band.
“The way Nextel will be remembered is as a very important player,” mobile wireless consultant Andrew Seybold said. “They did almost the impossible. They took an SMR system and converted it into a cellular system. Nobody thought they could get it done, but they did it. They worked with Congress and the FCC hard, and they made it happen — they became a player.”
Indeed, Nextel Communications was the first cellular company to offer push-to-talk service, which it allowed to compete against wireless giants like Verizon and AT&T in the lucrative enterprise space. For years, Nextel led the industry in customer loyalty and average revenue per user (ARPU) before mobile data became a primary driver of wireless revenues.
But there were complicating issues. Public-safety agencies complained that Nextel signals interfered with their mission-critical communications in the 800 MHz band, and the carrier had no clear path to compete in a data-driven market that required contiguous spectrum.
Both of these issues were addressed by the FCC order to reband the 800 MHz spectrum, leaving Nextel with contiguous spectrum in the 800 MHz band and in the 1.9 GHz band — frequencies that apparently were attractive to Sprint, which agreed to merge with Nextel before rebanding began.
From the outside, the merger looked like a disaster for Sprint. The integration of the two companies was difficult, the three-year rebanding effort was much more expensive than projected and is still not done, and Sprint decided to write off about 80% of the value of Nextel.
But, as Seybold notes, “the merger was all about that spectrum.” With the 800 MHz, 1.9 GHz and 2.5 GHz spectrum from Nextel, Sprint has been able to survive without having to pay big money at an auction. Time will tell whether investing in Clearwire was the best use of the 2.5 GHz airwaves, but the Nextel merger ultimately let Sprint consider that option.
What is clear is that the Nextel spectrum will play a big role in the future of Sprint. Also clear is the fact that the Nextel name no longer is part of Sprint, and that the highest-profile iDEN network has been retired forever. It’s a realization that had O’Brien thinking back to the early days of Nextel after attending an iDEN wake.
“I remember the first time I was at an airport carousel, picking up a suitcase, and I heard an iDEN device go off and it wasn’t mine. I saw somebody else—a complete stranger—using it,” O’Brien said. “That was just a surreal moment, and last night was another surreal moment, but it was quite a trajectory.”
While the shutdown of the Nextel iDEN network may be surreal to O’Brien and millions of others — from former employees to loyal customers — there is no question that the impact that Nextel and its iDEN network had on the wireless industry was very real.