Sprint nears deal to buy Nextel for $34 bn

Sprint is near a deal to acquire Nextel Communications for more than $34 billion in a transaction that would further consolidate the rapidly...

Sprint is near a deal to acquire Nextel Communications for more than $34 billion in a transaction that would further consolidate the rapidly changing telecommunications industry, according to executives involved in the negotiations.

The deal comes as the mobile phone industry faces fierce new market pressures, with competitors seeking to keep and attract customers who can jump easily from one operator to another. A merger between Sprint and Nextel would create a powerful new cellular company, with some 39 million customers. It would also mean that 74 per cent of the cellphone market would be controlled by three gigantic operators.

Cingular, which recently completed its acquisition of AT&T Wireless, is the largest in the US, with 46 million subscribers, and Verizon Wireless, the No 2 in the market, has 42 million subscribers.

Story continues below this ad

The boards of Sprint and Nextel are planning to meet separately on Tuesday to ratify the deal, executives said, and they hope to announce it on Wednesday. Still, the executives cautioned that several thorny details, including a possible deal-breaking tax issue, still need to be worked out and that the deal could fall apart.

‘‘It’s a marriage of survival rather than growth for Nextel and Sprint,’’ said Ken Dulaney, a telecommunications analyst at Gartner Inc. ‘‘They need each other’s customers.’’

A deal would help two companies facing increasingly difficult business prospects. Each is currently less than half the size of Cingular, and each could lose customers as Cingular and Verizon move aggressively with promotions and new plans that offer bundled phone services. Together they would be better able to fend off those rivals. Once the transaction is completed, the combined company would spin off Sprint’s fixed-line business. Both sides plan to call a merger of equals but in economic terms it is an acquisition of Nextel by Sprint.

Sprint CEO Gary D. Forsee, would be the combined company’s chief executive, and Nextel’s chief, Timothy Donahue, would become the executive chairman. — NYT

Day after PM Modi’s visit to the town, Manipur’s Churachandpur sees violent protest

India10 hr ago

Protests in Manipur's Churachandpur turned violent as two men were arrested for damaging decorations for PM Modi's visit. The crowd demanded their release and attempted to storm the police station. The men were eventually released after a bail hearing. The incident occurred after a clash between locals and police on Thursday, but the situation had calmed down before Saturday's visit.

View all shorts

Live Blog