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.

Wireless Networks Reviews part Two

This is the sequel to my attempt to provide some useful reviews on the services offered by various wireless networks. these reviews were mostly based on what consumers say on a particular carrier. L provided reviews on Verizon Wireless, US Cellular and AT&T in my first post.

Let us begin this sequel with a review of Virgin Mobile USA. This mobile phone network is known as a consumer champion. Of course, that doesn't mean that Virgin Mobile customers do not file complaints against their carrier. Like most wireless networks Virgin Mobile also receive complaints but surveys have shown that the company provides great consumer satisfaction and customer service.

Many consumers also like the fact that the network offers a wide variety of phones. Consumers like to have a lot of option so offering plenty of mobile phone models will sit well with consumers. A wide selection means that users will be more likely to find the most suitable handset to fit a certain lifestyle or personality.

Virgin Mobile Customers also like the freedom to roam anywhere in the country without incurring roaming fees that is offered by the company. But this offer is also limited because devices will only access Virgin Mobile cell phone towers. A mobile phone is virtually useless if the owner is in an area that is not covered by the wireless network.

Virgin Mobile also offers affordable and flexible mobile phone plans. Customers can get plans for less than fifteen bucks and do not have to worry about yearly contracts. Virgin mobile plans do not require contracts so there are not a lot of disputes.

There are also some negative feedbacks from Virgin Mobile consumers. For instance, Virgin Mobile is not yet offering GSM technology in their handsets. Consumers are unable to send packets of information to their recipients because of the absence of this technology.

The lack of relationship with other networks is also hurting some of their consumers. The network offers a wide coverage but they are still unable to offer service in some areas of the country. this means that consumers have to switch to other networks in order to use their phones.

Let us proceed with Alltel Wireless. This wireless network provider is known for proving quality service in the states that are covered by its network. Consumers in the 35 states being served by this carrier experience good call quality.

Altell also maintains good ties with other wireless networks so consumers can connect with their family and friends using thwe networks of other carriers. Customers have also expressed that this company provides quality customer service.

This company is also credited with offering generous benfits in their plans such us unlimited mintues during weeekends and nighttime. There are also a wide variety of Alltel services that are available to customers. For instance, laptop users can benefit from the networks WiFi service that grants online access in many places across the country.

However, Alltel's limited service to only 35 states can also bring problems to customers. Limited area coverage often translates to high roaming costs. Most Alltel special services are also unable in states not covered by the carrier. That means that customers may not benefit from Alltel promotions if they are out side the carrier's network.

I think I'm running out of space here. Making a very long blog post may not capture the interest of readers so I will limit the sequel to reviews of two wireless networks. i hope to cover the remaining networks in the third installment of this topic.

Virgin Mobile USA Suffer Continued Losses

It seems that another wireless network is going through a tough time.

It has been reported that despite adding more than 210,000 customers in the final quarter of last year, Virgin Mobile USA Inc. will be taking on a loss of $3 million to $6 million. The company stock was down more than 13% to $6.99 according to the news. Well, if I am an investor, then I will have a pleasant day with those figures.

I don't find it surprising that a lot of consumers decided to choose Virgin mobile over other wireless carriers. After all, this wireless network has been a consumer champion according to some studies. In fact, this company added a total of about 512,000 customers into their network last year and currently have nearly five million customers.

I think that this is a good indication that excellent customer service or providing good consumer satisfaction is a important factor in gaining customers. Some wireless networks who were criticized for subpar customer relations have promised better customer service programs for this year.

Let's go back to the scoop on Virgin Mobile's losses. According to reports the losses were caused by an increasing competitive prepaid landscape combined with economic impacts on the customer base of Virgin Mobile.

The CEO, of Virgin Mobile Inc., Dan Schulman, reassured his company's investors with these words, "We believe that sustainable, disciplined customer acquisition will result in higher return on investment and growth over the long term."

He is hoping that the current decline in the wireless network's stocks is only a short term effect of the economic factors that are affecting the company. He also pointed out that during the final months of the year, Virgin Mobile purposefully avoided cutting prices on its handsets. The CEO further explained that poor customer economics is the common result of temporary, aggressive pricing.

I hope that this slide is indeed only a temporary problem for Virgin mobile. They are doing a good job at providing good and cheap service to their customers. If they can adjust accordingly to the factors that have cause the decline of their stock value, then perhaps they can make their investors happy.

The Continuing Struggle to Please Customers

Compared to retailers and credit-card companies, wireless carriers provide a less useful and enjoyable customer experience. This was the information gathered from a study done by Forrester research. Perhaps this information also moved some carriers to promise better programs to increase consumer satisfaction next year.

It certainly seem logical for wireless service providers to pay attention to giving better service because the study ranked them fifth among nine industries. Retailers, investment firms, insurance companies and credit-card providers were all rated as giving better service than wireless networks.

Of course, wireless providers have also scored some points with their customers because they consider Internet service providers, TV service providers and medical insurance providers inferior to wireless carriers in terms of customer satisfaction. However, considering that the wireless phone industry is probably the fastest growing and most lucrative industry in this age, increasing the level of customer satisfaction should be made a priority. After all, a
happy and satisfied customer will be willing to spend more.

Sprint and Nextel brands, Alltel Corp., Virgin Mobile USA and prepaid provider Tracfone Wireless Inc. were included in the Forrester survey. The results showed that Virgin Mobile USA Inc. received the top ranking while the Sprint and Nextel brands received the lowest marks. Alltel ranked second followed by T-Mobile USA Inc. Verizon Wireless came in at No. 4, followed by Tracfone, and AT&T Mobility.

Virgin Mobile USA received “excellent” rating for ease of use. it also garnered the highest rank for its usefulness and whether or not their experience with the company was enjoyable. This is interesting since Mobile USA’s service runs on Sprint Nextel Corp.’s CDMA network.

It seems that Sprint Nextel is consistently earning thumbs-down from various consumer surveys. For instance, Consumer Reports’ said that it would not recommend service from Sprint unless a customer specifically wanted push-to-talk service. The company has also ranked near the bottom of customer satisfaction surveys by J.D. Power and Associates.

Fortunately, Sprint has responded to this ratings by hiring several thousand more customer care representatives to improve the customer experience. The company is also planning to increase its focus on retaining subscribers rather than trying to bring in new ones and launch loyalty-based incentive programs. Hopefully, the company will be able to increase it's stature in terms of providing customer care.

Self-Service Phone Activation Deployed by Virgin Mobile USA

A few days ago, Telespree Communications made an announcement concerning Virgin Mobile USA's deployment of their company's solution to automate its mobile handset programming process. Telespree Communications is one of the the leading device based self-service platform provider for wireless carriers and Mobile Virtual Network Operators (MVNOs).

On the other hand, Virgin Mobile USA is a major national provider of wireless communications services. They are known for offering services that have no annual contracts and serving nearly five million customers.

The company has began incorporating the Telespree programming solution on Virgin Mobile USA handsets in the third quarter 2007. The implementation of the OTA solution in all new handsets is part of their plans for the future.

Telespree technology has been deployed for first time programming of new Virgin Mobile USA devices. It is also employed for existing users who want to change or upgrade their mobile phones. Using wireless technology from Telespree, the mobile phone becomes automatically programmed. The process eliminates manual inputs or assistance from customer care agents.

This highly anticipated self-service solution is designed to streamlines wireless device programming and provisioning of voice and data devices. It is expected that the platform will deliver secure authentication and over-the-air device programming to any non-active, wireless device without customer care or inputs.

Wireless carriers may be able to offer 100% automated device programming as well as service enrollment and ongoing account maintenance to customers and retail channels if this process is proven to be successful. They will be able to benefit from customer support costs and the users will have improved experience.

Perhaps other mobile service providers will be drawn towards Telespree's solution. This process does have good advantages and undoubtedly other wireless companies will explore the possibility of using it for their operations.