Sprint Nextel and Virgin Mobile settle lawsuits over upcoming acquisition

Posted Oct 8th 2009 11:40AM by Brian White
Filed under: Deals, Sprint Nextel Corp (S)

Sprint Nextel Corp. (NYSE: S) will be purchasing the prepaid wireless carrier Virgin Mobile USA soon, and the last legal hurdle preventing the finalization of that acquisition seems to be history. Sprint Nextel will settle all the outstanding class-action lawsuits -- many of which see Virgin Mobile's $483 million price tag as undervaluing the company.

So, Sprint will become the leader of value wireless as a result sometime later this year. It already provides the most value-conscious contract wireless customers with values you won't find on any other carrier, like free and unlimited calling at any time to any wireless subscriber in the U.S. on certain plans. Combine that with its Boost Mobile prepaid brand and its $50 "all you can eat" plan, and Virgin Mobile's large customer base, and Sprint's resurgence under CEO Dan Hesse is being built on value more than anything.

This is not necessarily a bad thing. Sprint's strategy to stem customer losses and keep customers (and steal customers from the competition) is based on price -- the most sensitive buying variable in the majority of U.S. consumers. That is, unless it is bought by Germany's Deutsche Telekom as has been rumored and things change quite a bit. But then again, that rumor goes in and out of favor every other month.

Tags: inthenews, S, Sprint Lawsuits, Sprint Nextel, Sprint Virgin Mobile, Virgin Mobile

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Reader Comments (Page 1 of 1)

10-08-2009 @ 11:52AM

Sedo Oh said...

I disagree on concentrating ONLY on value. They are coming out with better phones (Palm Pre, Hero, BB Tour, Samsung Moment) and faster network. And their customer is more than acceptable nowadays.