Sprint Nextel Corporation has finally decided to shut down the Nextel Network. The elimination will be a gradual process and the closure will commence on 2013. In line with this, Sprint is planning to collaborate with chosen vendors to manage the integration of technologies into a single network. This projected is estimated to require at least $5 billion in funding to work.
There are three identified companies that will partner with Sprint to enact their goals: “Sprint chose Alcatel-Lucent, L.M. Ericsson Telephone & Co. and Samsung Electronics Co. Ltd. to handle the massive overhaul of its network, which the company estimates will save it $10 billion to $11 billion over the next seven years.”
Cost savings and budget cuts have been the trend for the whole organization of Sprint following the Netel acquisition in 2005—which was dubbed as the worst deal in telecommunication history. To worsen this status, Clearwire, another segment of Sprint (Sprint owns 54% of Clearwire) is currently raising $1 billion to fund their network and redeem its debts. The company is running out of cash—which can sustain them only until the middle of 2011. An on-going rift between the executives of Clearwire and Sprint is also aggravating the situation.
Speaking of management changes, Ericsson, a selected partner to supply network equipment and services for Sprint is also undergoing a predicament of its own. Well, at least the challenge comes with the executives and not the production or financing. Ericsson’s Chairman Michael Treschow will resign in the next two years. A big blow to the Swedish telecommunications organization.