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Sprint, Nextel Detail Merger Agreement

Donahue says the opposite is true. "I think [Sprint's] culture stands for entrepreneurship. I think it stands for innovation, and I think it stands for a culture that likes to win," Donahue said. "It's perfectly aligned with ours, and I think we're going to win."

Reaction to the planned marriage among Wall Street analysts was generally positive.


_____Nextel News_____
After Merger, Gradual Changes (The Washington Post, Dec 17, 2004)
For Nextel, Merger Is Time Of Trepidation (The Washington Post, Dec 16, 2004)
Service to Remain Same in Short Term (The Washington Post, Dec 16, 2004)
More Nextel News

Along with the technical strengths each company has developed, the two have different -- and complementary -- customer bases. Most of Sprint's 23.2 million wireless subscribers are individual consumers. Nextel, which has the highest revenue per customer in the wireless industry, counts business customers as its key constituency.

"Both companies bring good sets of assets to the table, so I think it's a good deal," said Teets of A.G. Edwards.

Though smaller, Nextel is the more profitable of the two companies. Last year it earned $1.54 billion on $10.82 billion in revenue, compared with Sprint's $1.29 billion profit on $26.2 billion in revenue in 2003.

Nextel's stock closed yesterday at $28.70, down $1.29. Sprint closed at $24.02, down $1.08.

Some analysts caution that significant challenges remain for Sprint Nextel.

"They are not out of the woods yet," said Zach Wagner, analyst for Edward Jones. "Their balance sheets are not great and . . . competition in the industry will not stop."

Wagner also said the merged company's four-year plan to switch customers to a single network providing both push-to-talk and high-speed data would be fraught with risks. "Customers will leave immediately if they are not satisfied," he said. "That's easier than ever now because you can take your phone number with you. It's going to be a major challenge, and the worst thing they could do right now is mess with push-to-talk, which is the crown jewel."

Some Sprint customers interviewed yesterday outside the company's store in Rockville said they were pleased with the prospect of getting access to Nextel's technology.

"It's not the best thing since sliced bread, but I like their walkie-talkie technology a lot," said Donald Priester, 60, of Damascus. "But their free incoming calls -- that's the main draw for me. I hope I can get that."

Vanessa Weston of Bowie, visiting the store because of repeated problems with her Sprint phone, said, "You never hear people having problems with their Nextel phones. With Sprint, I'm in this store all the time with problems."

Staff writer Michael S. Rosenwald and researcher Richard Drezen contributed to this report. McCarthy reported from Washington.


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