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After Merger, Gradual Changes

By Mike Musgrove
Washington Post Staff Writer
Friday, December 17, 2004; Page E05

Cell phone shoppers looking for new deals and features didn't find them yesterday, a day after Sprint Corp. and Nextel Communications Inc. announced a merger that the phone companies promised would shake up the wireless business.

Sprint was still promoting the slick Treo 650 "smartphone" with Internet access, personal digital assistant and built-in camera. Nextel was still showing off the BlackBerry 7520 with speakerphone, e-mail access and Nextel's popular push-to-talk service.


Sprint Nextel executives Timothy M. Donahue, left, and Gary D. Forsee vow a complete marriage of the two companies' technologies by 2007. (Orlin Wagner -- AP)

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Nextel Communications Inc.
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Company Description
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Sprint, Nextel Detail Merger Agreement (The Washington Post, Dec 16, 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)
Sprint, Nextel Announce Merger Plans (The Washington Post, Dec 15, 2004)
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And Sprint was still offering its basic 500 anytime-minutes plan for $40, compared with Nextel's 500-minute, $59.99 plan that includes free incoming calls.

That's the way it's going to stay for a while -- with no visible signs of a potentially big change in the works for cell phone users. It will be months before the proposed merger goes through, the companies say, and several years before the work of combining their incompatible networks is done.

"There's really nothing for customers to be on the lookout for," said Sprint spokeswoman Lisa Ihde.

When Cingular Wireless LLC and AT&T Wireless Services Inc. merged in October, the companies promised customers an almost immediate improvement in coverage and fewer dropped calls. Because those companies used the same technology, their networks quickly began working in tandem.

Sprint and Nextel, with their different technologies, said improvements in service could come sometime next year, as the two companies begin sharing some of the 50,000 cell towers the combined company would have.

The companies face a slight risk that some potential customers might shy away from signing up with Sprint or Nextel until they see how the merger shakes out in terms of phone features and prices, analysts said. "The guy on the street sometimes makes judgments on these things," said Keith Mallinson of research firm the Yankee Group.

For now, shoppers interested in the companies will have to choose: Nextel, which has 15.3 million customers, is known for its emphasis on business customers and its push-to-talk feature that provides almost instant connections to other Nextel customers. Its underlying system, known as iDEN, is used only by Nextel, works only with Motorola phones and can't provide high-speed Web access or some other advanced features.

Sprint, which has 20.1 million customers, is more consumer-oriented and operates on a more common system, known as CDMA, that works with various brands of phones. Sprint heavily promotes add-on features such as Web browsing and video. Sprint offers a push-to-talk feature, although it isn't as speedy as Nextel's.

Once the merger closes, Sprint Nextel promises some initial cooperative moves. These include quickly giving customers of each company push-to-talk access to those of the other, then creating a hybrid Motorola phone that could work on both companies' systems. The companies have not said how much they would charge for those options.

By 2007, Sprint and Nextel promise a full marriage of their technologies. The new system would use Sprint's CDMA technology and a new network that Sprint is already building to offer higher-speed, wireless Internet access for phones and laptops. The companies promise their next-generation phones also will offer a Nextel-quality push-to-talk feature.

Several Sprint customers said they were excited by the possibilities, especially Nextel's push-to-talk. "I'll think it's a good deal for me if they gave me access to that," said James Lewis, 40, of Rockville. "I hope they put their heads together and come up with the best service possible. But you never know."

Christian Matos, who sells Nextel phones at the Let's Connect Wireless store in Silver Spring, said he sees little but the upside for Nextel and its customers. He said he hopes families will be permitted to combine service plans and phones from both carriers under one bill. And he thinks that means he'll be able to sell more Nextel phones. "I think this is a great day for everyone," Matos said.

Staff writer Michael S. Rosenwald contributed to this report.


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