December 6, 2010

Sprint To Discontinue Nextel Network Starting In 2013

Sprint Nextel Corp said on Monday that it will start phasing out the Nextel part of its network in 2013, a decision that follows near-constant subscriber losses since Sprint bought Nextel in 2005.

Sprint said before that it would eventually shut down the aging Nextel network, but it had not said when.  The company has about 10.6 million subscribers on the Nextel network, some of whom are using it under the Boost Mobile brand.  Another 400,000 use phones that can access both the Sprint and Nextel networks.

Over one in five Sprint subscribers use the Nextel network.  Sprint plans to offer them Nextel's signature push-to-talk function on the Sprint network instead.

Nextel's push-to-talk function made it popular with outdoor workers like contraction crews.  However, the network doesn't support fast data transfers, making it unsuitable for smartphones. 

Sprint made a push to use the network in 2009 for cheap prepaid service, but it has shifted away from that strategy this year.

The phase-out is part of a network modernization plan it announced on Monday that will cost $4 billion to $5 billion.  The move could save Sprint $10 billion to $11 billion over seven years. 

Nextel's network equipment and phones are supplied nearly exclusively by Motorola Inc., which invented the underlying iDEN technology.


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