Why is Sprint Nextel bleeding customers?


Sprint Nextel Corporation (NYSE:S) is known for being an innovative wireless company that has had many firsts and close-firsts in the mobile phone carrier game. Mobile TV, 3G data networks, wireless online music stores and other features have -- in the past -- set Sprint Nextel apart from competitors like Verizon Wireless and Alltel -- both of which use the same wireless network standard as Sprint Nextel known as CDMA.

But, as Verizon Wireless and larger competitor Cingular Wireless are adding over a million new subscribers per quarter, Sprint Nextel actually lost over 300,000 subscribers in its latest quarter. How could this be?

The carrier blamed the loss on its older iDEN network that still contains customers from the older Nextel network. Sprint and Nextel merged in mid-2005 in response to mergers from Verizon Wireless and Cingular Wireless. Nextel's radio spectrum holdings were very valuable as well, and were a key factor in the merger.

With former (and current) Nextel subscribers being some of the most loyal in the wireless industry -- from my experience -- I am perplexed over why so many Nextel subscribers have left the carrier in its latest quarter. Has Sprint given up on the Nextel network and has service gone to hell or something? Sprint's Gary Forsee will most likely be shown the door this year unless Sprint finds a way to stem customer defections and actually gain customers.

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