Sprint is divesting portions of its iDEN network because of a 2006 court ruling that Sprint’s merger with Nextel violated a management agreement between Sprint and its affiliate iPCS. Specifically, the ruling said that Sprint Nextel had infringed upon iPCS’s exclusive right to “own, operate, build or manage” the Sprint PCS network in the midwest and that Sprint had to divest of its iDEN assets in portions of Illinois, Michigan, Iowa and Nebraska.
Sprint’s goal is to sell the iDEN network pieces to buyers by the court-ordered deadline of January 25, 2010. The company is encouraging all prospective buyers to contact Citi, its financial advisor, for more information. The divestments will have a minimal impact on its financial bottom line, Sprint says.
The feud between Sprint and iPCS was one of many headaches the company has had to work through since its 2005 merger with Nextel. The biggest by far has been the fact that while Sprint subscribers are on a CDMA network, roughly 15 million Nextel subscribers are still using the old Nextel iDEN network, which means that Sprint hasn’t been able to bring 3G services to more than a third of its customer base.
Running two different networks has also made Sprint’s customer service operation less efficient, resulting in massive subscriber losses over the past few years. In 2008 alone, for instance, Sprint lost over 4 million wireless subscribers.