Sprint Nextel to Acquire Virgin Mobile for $483 million

It looks like like two known wireless network operators will merge to form a larger entity. After acquiring Nextel, Sprint has made a deal to merge with Virgin Mobile.

Sprint has proudly announced that its boards of directors have approved a definitive agreement to acquire Virgin Mobile USA for a total equity value of approximately $483 million. This means that the wireless network operator will assume control of Virgin and its 5.2 million customers.

So is this the end of Virgin Mobile? Well, no. Sprint says that Virgin Mobile will be maintained as a separate brand and offered along side its Boost Mobile pre-paid service. So the bitter rivals in the prepaid service market will now serve one master.

The CEO of Virgin Mobile USA will continue to run the Virgin Mobile division, and will report directly to Sprint CEO Dan Hesse.

But why did Sprint decide to acquire Virgin Mobile? Here are the reasons that the company revealed on its Sprint Nextel-Virgin Mobile merger announcement:

• Strengthens Sprint’s position in the fast growing prepaid segment.
• Enhances cross selling of full suite of Sprint products and services across a larger target audience.
• Free cash flow accretive for Sprint before synergies.
• Synergies to be derived from general and administrative reductions, operational efficiencies, and streamlined distribution.
• Sprint gains deeper managerial talent with additional expertise in the prepaid segment

The Sprint Nextel-Virgin Mobile merger is expected to close in late 2009 or early 2010.

Well, this development is certainly interesting. I thought that Sprint was on its way down but this move seems to breath new life to the company. Verizon Wireless also recently acquired Alltel so perhaps AT&T and T-Mobile will also make a move.

That's it for this news on the Sprint Nextel-Virgin Mobile merger. Tune in to this blog for the latest news and updates on wireless network operators.

Verizon Wireless Proposes Change to Existing Roaming Rule

Here's an interesting update to users who like to roam outside the confines of their carrier's wireless network. Verizon Wireless has offered a bold proposition to change the existing rules on roaming.

So why would Verizon Wireless propose the existing roaming rule? Well, pressure from the government has encouraged or forced the carrier to propose a change to the current laws regarding roaming.

Roaming is a term coined to describe a practice that involves extending of connectivity service in a location that is different from the home location where the service was registered.

The existing roaming law allows wireless network operators the choice to refuse from providing roaming services to competing companies that own spectrum in a given market but have yet to build out a network there. However, minor and regional wireless network operators claim that the existing roaming rule negatively affects customers, who are unable to roam in those regions and will be left without service.

Verizon Wireless announced that it will support legislation that requires it to provide roaming services in this type of circumstance. However, there's a catch. Big Red will only support legislation that sets a 2 year limit to the requirement.

So how will this play out? The letter containing the proposal to change the existing roaming rule has already been sent to several senators. However, considering how politics work, it may take months before actual changes to the rule are made.

That's it for this news on major wireless network operators. Tune in to this blog to get the latest news

Sprint and Clearwire Launches WiMAX Wireless Network in Las Vegas

The WiMAX wireless network and its services will soon open in Las Vegas has officially launched the . Sprint and ClearwireWiMAX wireless network in Sin City and services will begin in the metropolitan area on August 1.

The folks in Las Vegas can avail of the WiMAX wireless network with average speeds ranging between 3 and 6 services for as low as 20/month. Sprint boasts that WiMAX can offers peak downlink speeds of more than 10MbpsMbps.

Sprint and Clearwire also announced that the WiMAX wireless network will be launched in more market's by the end of the year. This high speed network will also go live this year in:

• Atlanta
• Portland
• Charlotte
• Chicago
• Dallas
• Ft. Worth
• Honolulu
• Philadelphia
• Seattle

Samsung also announced a WiMAX-enabled mobile Internet device that well be available starting on August 1. the Samsung Mondi is reportedly the the most advanced Mobile WiMAX-enabled handheld device in the U.S.

This device offers WiFi, GPS, 3 megapixel camera, a QWERTY keypad, a 4.3-inch touchscreen, Opera 9.5 and a customizable set of widgets on top of Windows Mobile. It is expected to be be available in Vegas-area Best Buy and Clearwire outlets starting August 1st.

That's it for this update on the WiMAX wireless network. The Samsung Mondi sure looks sweet. Clearwire and Sprint seems to be gaining momentum with this venture. I hope that they can launch this 4G technology in other markets as well.

Tune in to this blog for more news and updates on Wireless networks.

AT&T Wireless Responds Governemnt Review

A few weeks ago, I blogged about the Department of Justice has begun looking into large U.S. telecommunication and wireless networks for possible anti-competitive practices. AT&T Inc. and Verizon Communications Inc. were said to be the main target of the government review.

Apparently, Sen. Herb Kohl's congressional panel is in-charge of reviewing potential anti-competitive behaviors of the country's largest providers of wireless network services. There are concerns over texting prices, roaming disputes, disputes over spectrum and exclusive access to popular phones.

However, AT&T is not going down without a fight. The carrier immediately decided to make a response to this information on the anti-competitive practices review to be conducted by the DOJ.

James Cicconi, an AT&T senior executive vice president, delivered a statement in defense of his company. The AT&T senior executive vice president indicated that charges of anti-competitive practices by US wireless networks are unfounded. He stressed that the prices of U.S. wireless are much lower than in any other major industrialized country.

Cicconi also argued that exclusive handset arrangements are standard practices. Exclusive access allows a carrier and a manufacturer to split the high cost of marketing. The case is similar with early termination fees that help wireless networks to recoup money spent discounting handsets.

Well, this is certainly interesting. I hope that a review will bring about pro-consumer policies. I wonder why Verizon Wireless did not respond to this anti-competitive practices review. AT&T decided to take action quickly and their response make sense.

However, an inquiry into practices will only help consumers in my opinion.

That's it for this post on AT&T's response to the government's anti-competitive practices review. Tune in to this blog for more news and updates on wireless networks.

Ericsson to Assume Responsibility for Sprint's CDMA and iDEN Wireless Networks

Sprint recently announced a wireless network services agreement with global leader Ericsson. This agreement is called the "Network Advantage" effectively allows Ericsson to take over the day-to-day services, provisioning and maintenance for the Sprint-owned CDMA, iDEN and wireline networks.

The Sprint "Network Advantage" deal is reportedly beneficial to both parties. Sprint will gain operational efficiencies while Ericsson will be able to expand its wireless network services business in North America.

The carrier believes that the “Network Advantage” deal will catapult the company to elite status in wireless and wireline network effectiveness. Sprint’s Steve Elfman, President of Network Operations and Wholesale, released this statement:

“No other U.S.-based carrier has followed through on the business-enhancing vision inherent in Network Advantage. Our best-ever network performance will become even better by leveraging Ericsson’s world-class leadership in network services, their proprietary tools, and the knowledge of more than 30,000 dedicated and highly-specialized service professionals to power Sprint’s Now Network.”

The “Network Advantage” agreement between Sprint and Ericsson will involve between $4.5 billion and $5 billion (USD) over the seven-year term of the contract. Around 6,000 Sprint employees will begin performing their network functions as Ericsson employees sometime in the 3rd quarter.

Here are the key elements of the “Network Advantage” agreement between Sprint and Ericsson:

• Sprint retains full ownership and control of its network assets, and solely owns network strategy and investment decisions.
• Customers will continue to work directly with Sprint employees as their primary contact, as Sprint retains full control of the customer experience, customer technical support and services review.
• Sprint retains technology and vendor selections.
• Ericsson assumes responsibility for the day-to-day services, provisioning and maintenance for the Sprint-owned CDMA, iDEN and wireline networks.
• Ericsson will optimize Sprint’s multi-vendor inventory of assets such as spare parts and transmission equipment, and provide processes and tools for managing the national network platforms and operational support systems.
• The transferred employees will become part of Ericsson Services Inc., a wholly-owned Ericsson subsidiary based in Overland Park, KS, a move that retains jobs in the United States. No force reductions are currently contemplated as a result of this agreement.

This is certainly interesting Let's see if the “Network Advantage” agreement between Sprint and Ericsson works well for both companies. That's it for this wireless network information. Tune in to this blog for more news and updates.

AT&T and Verizon Wireless Anti-Competitive Practices Review

Trouble might be brewing for both AT&T and Verizon Wireless. According to the Wall Street Journal, the Department of Justice has begun looking into large U.S. telecommunication companies such as AT&T Inc. and Verizon Communications Inc. to see if any abuse of market power is happening.

Now, there is no cause for alarm. This process is still very much in its infancy and an actual investigation may not be even be opened. However, it is interesting to see that the government is looking into the matter. This tough stance by the DOJ appears to be a reflection of the Obama administration's aggressive stance on antitrust enforcement.

The AT&T and Verizon Wireless anti-competitive practice review seems to have originated from suspicions within the DOJ. Apparently, the massive growth achieved by these wireless network operators have led some to question if it might detrimental effects on smaller competitors and consumers.

Large wireless network operators like AT&T and Verizon Wireless have huge power and influence in the market, this means that they are capable of stifling their competition.

The AT&T and Verizon Wireless anti-competitive practice review will also focus on other areas like the exclusive handset deals. Some wireless network operators have exclusive rights to some high-end handsets and it might be prevent smaller carriers from offering a fair challenge. For instance, AT&T has the iPhone and Verizon Wireless has the BlackBerry Storm.

The DOJ is also looking into the limitations on what third-party companies can do using carriers' data networks. Allegedly, some wireless network operators are blocking certain media download and VoIP apps to prevent legitimate competition from rival services.

Well, I think this news is very interesting. An investigation would expose some unfair practices by the carriers. If there are any. I would really want the government to look at exclusive handset deals. Maybe it would lead a Verizon subscriber like me getting a CDMA iPhone.

That's it for this post on the AT&T and Verizon Wireless anti-competitive practice review. Tune in to this blog for more news and updates on wireless networks.