Report: Sprint's merger with Nextel ranked among least successful
Although Sprint Nextel (NYSE:S) continues to improve its metrics following years of subscriber defections, the merger between Sprint and Nextel remains a black-eye for the firm. According to a ranking by Bloomberg, Sprint's 2005 merger with Nextel is one of the worst of the recent M&A boom.
According to Bloomberg, out of the 100 biggest deals from 2005 to 2008, 53 companies' stocks lag behind their peers two years later. Sprint is now valued at less than half of the $36 billion it paid for Nextel five years ago. By Bloomberg's ranking, that makes the Sprint deal the third-worst of the bunch.
Despite the dubious distinction, Sprint executives have argued the company has made improvements since its Nextel merger. Indeed, the carrier reported its first net wireless subscriber growth in three years in the second quarter. "I'd say we're turning a corner," Sprint CEO Dan Hesse told FierceWireless last month. "I don't want to make definitive statement that we've turned the corner."
Shortly after its mega-merger with Nextel, Sprint began losing subscribers and tumbling in customer service rankings under former CEO Gary Forsee. Hesse took over in late 2007 and has tried to right the ship and Sprint has gradually improved its customer care ratings and device lineup.
However, Sprint is still struggling to integrate Nextel's iDEN network into its operations. In the second quarter, Sprint added 136,000 postpaid customers to its CDMA network but lost almost 364,000 iDEN customers.
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