Sprint May Write Off Value Of Nextel Acquisition - InformationWeek
IoT
IoT
Business & Finance
News
1/31/2008
04:53 PM
50%
50%
RELATED EVENTS
[Cybersecurity] Costs vs. Benefits
Feb 28, 2017
This online event, hosted by the editors of Dark Reading, brings together IT security leaders, bus ...Read More>>

Sprint May Write Off Value Of Nextel Acquisition

Sprint Nextel announced that it might write off $30.7 billion, most of it likely recorded from its acquisition of Nextel.

Just a day after Sprint Nextel sang the praises of Nextel's push-to-talk and Nextel's iDEN network, Sprint told investors that it might write off the $30.7 billion in goodwill value, most of it likely recorded from its acquisition of Nextel.

In a filing Thursday with the Securities and Exchange Commission, Sprint Nextel said the write off could "represent a substantial portion, and potentially all" of the nearly $31 billion the company keeps on its books. The filing was reported by the Kansas City Star.

The charge presumably would cover much, if not all, of the $35 billion that Sprint paid to acquire Nextel, representing most of the difference between what Sprint paid for Nextel and what it believes the Nextel business is worth now.

Nextel had great success with its push-to-talk technology, but it also had a hodge-podge of spectrum that Sprint has struggled to integrate with its CDMA network. A year ago, former CEO Gary Foresee complained that demand was dropping for its iDEN network. In recent weeks, new CEO Dan Hesse has instituted sweeping changes, including layoffs. Many more announcements are expected in coming weeks.

On Wednesday, Hesse said subscribers will see continued investment in push-to-talk and the iDEN network. "The Nextel National Network is key to delivering Nextel Direct Connect," he said in a statement. "Sprint has invested significantly during the past two years and the network is performing at best-ever levels. Customers can expect to see continued investment and the introduction of new handsets to utilize the network's unique capabilities."

Sprint also highlighted its coming "push-to-x" service, which instantly sends a text message and other data over the iDEN network.

In October, Fitch Ratings, which examines the creditworthiness of companies, said it was concerned about Sprint's ability to migrate the iDEN customer base to Sprint's CDMA network.

Sprint is also challenged by its expensive drive to deploy a $5 billion nationwide WiMax network that could compete with its CDMA2000 EV-DO network. Earlier this week, reports surfaced that Sprint was talking with Clearwire, Intel, and Google, as well as others, in an effort to drum up financial partners for its WiMax rollout.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of the Cloud Report
As the use of public cloud becomes a given, IT leaders must navigate the transition and advocate for management tools or architectures that allow them to realize the benefits they seek. Download this report to explore the issues and how to best leverage the cloud moving forward.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of November 6, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll