Impact of the Sprint Nextel Merger

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Mergers of large corporations come as a rather controversial issue to consumers and government officials alike. Many are afraid of the monopolistic outcomes of such an occurrence; however, like anything else, it must be put into perspective. With the Sprint and Nextel merger which took place in the middle of 2005, we have to look to the specifically at the telecommunications industry and assess whether the effects were efficient and positive or negative. With regards to the combination of network platforms, protection for the respective companies, and the previous merger which was granted we find that the Sprint/ Nextel merger was in fact beneficial to the market and the consumers.

The first advantage of the merger would the uniting of the two company's cellular network platforms. Sprint would get access to Nextel's large base of business customers while Nextel would get an opportunity to expand faster since it was approaching a multi billion dollar investment decision to upgrade its network infrastructure in any case. (1) Nextel boasts the largest all-digital wireless network in the country based on Motorola's IDEN (Integrated Dispatch Enhanced Network) which has very few takers outside of Nextel. (2) Sprint has also begun development on a similar walkie-talkie feature and it on the other hand uses Sprint's network based on CDMA, a technology developed by Qualcomm that is supported by about a fifth of the world's cell phone operators. (3) With Sprint/Nextel and Verizon both on CDMA and ATT/Cingular and T-mobile on SGM, the nation will be one more step closer to completely uniting its cellular platform and achieving the same freedoms of travel as the Europeans, who don't have to worry about anything to use their cell phones throughout the continent.

With the industry's leader and runner up having such a big market share over the rest of the companies, this merger will soften the sharp attacks for both Sprint and Nextel. After the completion of the deal,...
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