What Next, Sprint Nextel?

Today probably comes as little surprise to anyone. Sprint (NYSE: FON  ) will purchase Nextel (Nasdaq: NXTL  ) for $35 billion, resulting in a company that will be called -- you guessed it -- Sprint Nextel. This deal will result in the third-largest wireless concern.

Joined, Sprint and Nextel will post $40 billion in sales and boast more than 35 million customers. The only other companies that will be ahead of this new wireless concern will be Cingular Wireless (a joint venture between SBC (NYSE: SBC  ) and BellSouth (NYSE: BLS  ) and Verizon Wireless (a unit of Verizon (NYSE: VZ  ) , of course.)

Fool contributor Dave Mock has been following the slowly dwindling ranks of the top wireless services providers as they make deals with one another. He has pointed out in the past that the industry has been ripe for consolidation, and closely tracked this developing story as well as the Cingular/AT&T Wireless marriage. Now, as he commented on this past Monday, the big six in wireless have shrunk to four -- namely, Cingular, Verizon, Sprint Nextel, and T-Mobile.

Despite the fact that telecom has been down and out for quite some time, wireless services have proven a bright spot in the industry. Sprint's courtship with Nextel also exposes it to Nextel's strongest suit -- its push-to-talk, walkie-talkie service, which has proven to be its most popular product, as well as its customer base, which Mock pointed out is a tempting one, spending about $70 per month.

The companies speak of $12 billion in cost savings related to the combination. In the meantime, though, questions and concerns about how easy it will be to Sprint and Nextel integrate are hardly uncalled for -- or unprecedented. For now, investors are on hold as we all see how the next stages of consolidation unfold.

SBC is aMotley Fool Stock Advisorpick. What else makes the grade? Try the service for six months, risk-free.

Alyce Lomax does not own shares of any of the companies mentioned, although she's been a Sprint PCS user for quite some time.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 504361, ~/Articles/ArticleHandler.aspx, 10/20/2016 5:44:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,162.35 -40.27 -0.22%
S&P 500 2,141.34 -2.95 -0.14%
NASD 5,241.83 -4.58 -0.09%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/20/2016 4:02 PM
VZ $49.14 Down -1.24 -2.46%
Verizon Communicat… CAPS Rating: ****