Sprint Nextel Corp. CEO Dan Hesse says he feels
relatively safe from credit crunch problems even though losses from Sprint's $35 billion acquisition Nextel have put the firm's future in question.
Why? "On the consumer side, wireless has become a staple -- people would rather give up their TV or Internet access before they give up their cell phone; we believe we are more insulated," Hesse explains. Fair enough. But what about Sprint losing share to competitors? Well, maybe Sprint's big bet on WiMax service will pay off. Hesse's
$14.5 billion JV with Clearwire Corp. is getting under way as Sprint
launched a commercial service in Baltimore.
As for the Nextel sale, SprintConnection.com reported that Hesse said, "
We don't have to sell the iDEN business. We don't have to do this. If we get an offer that is compelling, that is de-levering and all sorts of other things, we will consider it. If we don't, we will hold on to it. It's a valuable asset."
Hesse said Verizon Communications Inc. is jumping in to the push-to-talk market that the iDEN technology has long dominated and that AT&T Inc. continues to make a similar push.
One major is question is whether
potential buyers can get financing in a down economy. And there's still the fact that Sprint will not get anything close to the $35 billion it paid for the business -- now valued between $5 billion and $6 billion -- and it will still be stuck with an operation it has yet to integrate properly, which led to customer defections in the first place.
That WiMax effort looks more and more important. -
Baz Hiralal
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